A £28bn investment in the UK’s energy network will push up household bills by more than £100 by 2031, Britain’s energy watchdog has said.
Under the plan, announced by Ofgem on Thursday (December 4), £17.8bn will go towards maintaining gas networks and £10.3bn will be used to improve the electricity transmission network.
In total, £108 will be added to household bills by 2031, with £48 for gas and £60 for electricity.
But the regulator said that overall the amount people would pay for energy would actually only rise £30 a year as the proposals would reduce UK reliance on imported gas and make wholesale energy cheaper.
Jonathan Brearley, Ofgem chief executive, said the funding would keep Britain’s energy network “among the safest, most secure and resilient in the world”.
“The investment will support the transition to new forms of energy and support new industrial customers to help drive economic growth and insulate us from volatile gas prices,” he said.
Ofgem also pledged to hold network companies accountable for delivering on time and on budget.
“We make no apologies for the efficiency challenge we’re setting as the industry scales up investment,” added Mr Brearley.
“We’ve built strong consumer protections into these contracts, meaning funds will only be released when needed and clawed back if not used. Households and businesses must get value for money, and we will ensure they do.”
Ofgem said the investment would fund 80 transmission projects and associated works across the UK over the next five years.
It said grid capacity would be increased through new power lines, substations and other technologies that would to power millions of households and help drive economic growth.
“Investing now to maintain world class resilience and expand grid capacity is the most cost-effective way to harness clean power, support economic growth and protect the country from gas price shocks,” the regulator added.
“[The] investment will upgrade power and gas grids, creating a future-ready system that better shields customers from volatile energy bills.”
