Future increases in the so-called carbon tax are expected to be curbed in the upcoming Budget.
Chancellor George Osborne is expected to announce next week that the carbon tax will be frozen from 2015 to 2016.
The carbon price floor is intended to put a minimum price in place for every tonne of carbon dioxide that is emitted, with a view to encouraging the UK to look to greener solutions for producing energy.
The tax is intended to increase the cost of burning fossil fuels, coal, oil and gas, and is intended to encourage people towards more renewable energy resources.
Critics of the tax plan have said that the freeze would force some plants, such as coal plants, to close before an alternative could be implemented to replace them.
The u-turn over the tax, some say, could make the risk of blackouts worse as investors may become more cautious in investing in power plants and potentially force a number of gas plants to close.
Meanwhile, the tax would push up the cost of electricity bills, which would affect homeowners and industries.
By freezing the carbon tax, this could help to protect investments in jobs in sectors such as manufacturing as businesses will not need to set aside as much cash to cover running costs.
It is expected that by freezing the carbon tax, families could be saved from paying up to £20 extra annually on their electricity bills by the year 2020.
Green groups have criticised the plan to curb the carbon tax as they fear that people would be less inclined to build wind turbines and solar farms.
Meanwhile, Mr Osborne is also being urged by campaigners to the amount of revenue that has been gained from the carbon tax so far to help those who are considered to be in fuel poverty. For example, they have suggested that the money be used to insulate the homes of the most vulnerable.