The British government has agreed that a consortium led by the French energy giant EDF will build Britain's first new nuclear power plant in a generation.
Ministers say the deal to build the Hinkley Point C plant in Somerset will help take the UK towards low-carbon power and lower generating costs in future.
But environmentalists said the money could be better spent on renewables.
The government estimates that with new nuclear power - including Hinkley - the average energy bill in 2030 will be £77 lower than it would have been without the new plants.
However Energy Secretary Ed Davey could not guarantee this because of the "uncertainties".
The two reactors planned for Hinkley, which will provide power for about 60 years, are a key part of the coalition's drive to shift the UK away from fossil fuels towards low-carbon power.
Hinkley currently produces about 1% of the UK's total energy, but this is expected to rise to 7% once the expansion is complete in 2023.
Friends of the Earth's policy and campaigns director Craig Bennett said the agreement meant locking the UK into costly nuclear power for decades.
"The quickest way to end our costly fossil fuel dependency is through energy efficiency and renewable power, not new reactors that will suck up precious investment and take years to complete," he said.