IN 1974 a Conservative government concerned about dwindling coal stocks instituted the three-day week to conserve electricity. Industrial action by miners was responsible for the shortage then. Now politicians warn that Britain could again face blackouts if action is not taken soon to upgrade its energy sector. And if the warnings are dramatic, the government's proposals for changing the way electricity is produced and traded are no less so.

Britain currently has an unusually deregulated, competitive energy market. But leaving the system as it is “would not be in the national interest”, noted Ed Davey, the energy secretary, when introducing a draft bill on May 22nd. Many of the country's power plants face closure because they are inefficient, polluting or old. Energy firms have tended to sweat their assets rather than invest in new facilities. As a result, some 20% of generating capacity is due to come offline within a decade. Britain has also become increasingly reliant on imports, often from Russia, which uses commodities as a crude diplomatic tool.

These days nearly half of Britain's electricity is generated from gas. A further 28% comes from coal, the most polluting fuel (see chart). Renewable technologies account for a mere 7% of current supplies. This sits ill with ambitious government pledges to cut planet-heating emissions and get 15% of energy from renewable sources by 2020. To achieve that, a far greater proportion of electricity must come from clean sources.

All this will be expensive: the industry regulator reckons that around £200 billion ($315 billion) needs to be spent by 2020. Investment currently amounts to £4 billion-6 billion a year. But the move to greener power in Britain must be achieved without infuriating voters already upset at high bills. Brian Potskowski of Bloomberg New Energy Finance, an energy consultancy, compares electricity-market reform to preventive surgery. Does the surgeon know what he is doing?

The bill introduces long-term contracts for low-carbon generation. These will set a minimum price for electricity generated for each technology, paid by consumers through their bills, to assure firms they will recoup high upfront costs. The contracts are intended to spark investment in clean and nuclear power—which will help the country hit its emissions targets—while also expanding the portfolio of generating sources and replacing declining capacity. The government claims it will also get consumers “off the hook” of volatile fuel prices, which it takes to mean ever rising ones. Ministers warn that bills would go up faster if the country keeps burning fossil fuels at the rate it does now.

The market certainly needs to adapt to the shifting economics of electricity generation. For traditional power sources such as coal and gas, generators' main cost is the price of fuel—set-up and running costs are fairly slim. That equation is inverted for both renewables and nuclear, where the fuel is free (wind, sun) or comparatively cheap (nuclear) but upfront costs are hefty and often paid out years before they reap any return.

No deregulated market has attracted much low-carbon investment without some form of long-term guarantee, notes Ronan O'Regan of PwC, a consultancy, so some inducement for low-carbon generation may be needed. But the government has chosen not to use market incentives such as auctions, at least for now.

The draft bill represents a huge about-turn from the current deregulated market to a centrally-planned one. In a renewable energy “road map” in July 2011 the government specified how much energy it hoped to generate from different sources by 2020. The coalition is openly pro-nuclear. The new bill adds to the state intervention—in 2013 a minimum price for each technology will be specified. Some contract prices may even be decided on a project-by-project basis. That “makes a nonsense of competition”, says Tom Burke of E3G, an environmental consultancy.

The likely winners are some of the most expensive forms of generation. The government wants offshore wind to account for nearly a fifth of Britain's renewable energy by 2020, for example, yet by official estimates offshore generation currently costs between double and triple that from gas. Onshore wind, a far cheaper technology, is to account for only 12%. The real cost of nuclear reactors has gone up, not down, in the decades since such facilities were first built, yet ministers hope eight new ones will be constructed—and have already listed the chosen sites.

It is doubtful that the draft bill has enough detail to break the current hiatus in energy investment. It is still unclear how prices will be determined, how often they will be reviewed and how contracts will be implemented. Uncertainty about the form of the contracts compounds existing investor fears about the durability of government price guarantees on energy—British politicians have already rowed back on subsidies for solar generation, as have other European governments.

The price of mishandling energy-market reform is high. Government predictions that fuel prices will keep rising may be mistaken and it will not be able to bat the blame for high electricity bills onto utility firms, as now. If the government gets it wrong, already sceptical consumers could turn against further efforts to mitigate climate change. The public already believes, wrongly, that it is paying dearly for green energy. And attitudes to the environment are hardening. Between 2005 and 2010 the proportion of people telling Ipsos MORI, a pollster, that they were not concerned about climate change rose from 15% to 27%.

Electricity demand will grow again as Britain emerges from recession—the nation does not need more capacity tomorrow, but it will do soon. Meanwhile the legislative process drags on and the documents detailing the policies get longer and more complicated. “I'm not sure what plan B is,” says Daniel Grosvenor of Deloitte, a consultancy. A phrase all too familiar from discussions about the economy could yet become apt in energy too.