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The low carbon energy will come from nuclear, wind, solar and marine power, as well as clean coal, Energy and Climate Change Secretary Ed Miliband said.
Britain's transition to a low carbon economy will add about 6 percent to domestic energy bills by 2020.
"Renewables, nuclear and clean fossil fuels are the trinity of low carbon and the future of energy in Britain," he said in a statement.
"Under our plans we will get 40 percent of our electricity from low carbon energy by 2020 and more in the years afterwards.
"Our plan will strengthen our energy security, it seeks to be fair to the most vulnerable, it seizes industrial opportunity and it rises to the moral challenge of climate change."
The British government will commit up to 60 million pounds ($98 million) for wave and tidal energy and 120 million pounds for offshore windfarms, he added.
The plan will enable individuals and groups generating their own renewable power to sell it back to the country's grid from next April.
Miliband also proposed giving regulator Ofgem new powers where it believes there is anti-competitive behavior in the generation of electricity.
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