Energy Minister Jesse Norman said: “Thanks to this auction, homes and businesses can have confidence in the availability of that electricity at the lowest possible cost.”
But Jon Ferris, an analyst with Utilitywise, likened the scheme to a “sledgehammer trying to crack a nut”.
“Government should instead incentivise demand reduction or flexibility at peak times to help consumers and the businesses that depend on a well-functioning energy market particularly at a time of economic uncertainty,” he said.
The costly winter power programme piles further pressure on energy consumers who are expected to face rising energy bills in the months ahead.
Npower put its prices up by over £100 a year for 1.4 million households on Friday and other large energy suppliers are expected to follow, with experts predicting that by the end of April all six will have raised prices by between 5pc and 10pc.
The hike is likely to be seen as a slap in the face to the energy regulator, which warned companies only a fortnight ago to keep a lid on prices.
Ofgem boss Dermot Nolan issued suppliers a stern caution against price hikes, saying the companies should be able to swallow a surge in energy costs to avoid passing on higher prices to consumers.