Britain's energy regulator Ofgem has approved a £28 billion investment to upgrade the country's energy infrastructure over the next five years. The decision will push up household network charges by £108 by 2031, marking the largest electricity network expansion since the 1960s.
The approved investment represents a significant increase from the £24 billion initially proposed in the summer. The funding will be split between £17.8 billion for gas transmission and distribution networks and £10.3 billion for the high-voltage electricity grid. Of the £108 increase to bills, £48 will cover gas networks while £60 will fund electricity grid improvements.
Government backs decision
The UK government and the Department for Energy Security and Net Zero welcomed Ofgem's approval. A DESNZ spokesperson said: «This government is taking action to bring down energy bills for families, with the Budget taking an average £150 of costs off bills in April, and expanding our £150 Warm Home Discount to over six million families. Upgrading our gas and electricity networks after years of underinvestment is essential to keep the lights on and ensure energy security for our country. Without these plans, which were first set out under the previous government, costs would spiral and our security would be compromised. The only way to bring down bills for good and get off the fossil fuel rollercoaster is with this government's mission to deliver clean homegrown [energy] that we control.»
Ofgem chief executive Jonathan Brearley emphasized the regulator's commitment to value for money. He said: «Every pound must deliver value for consumers. Ofgem will hold network companies accountable for delivering on time and on budget, and we make no apologies for the efficiency challenge we're setting as the industry scales up investment. We've built strong consumer protections into these contracts, meaning funds will only be released when needed and clawed back if not used.»
Net impact on bills
Ofgem insists the net increase to bills will be lower than the headline figure. After accounting for approximately £80 in savings from expanded grid capacity and increased power generation, the regulator projects a net increase of around £30, or £3 per month. Network charges currently represent about a fifth of average annual energy costs.
The investment aims to support the transition to new energy forms, attract industrial customers to drive economic growth, and reduce reliance on volatile imported gas prices. Ofgem expects costs to fall in future years as renewable electricity generation expands. The approval comes alongside a separate energy price cap change that will increase bills by 0.2% from January due to rising government policy costs.
Note: This article was created with Artificial Intelligence (AI).
