Energy investment of £28bn approved by regulator Ofgem
Household energy bills will rise to help fund £28bn investment in the UK’s energy network.
The bulk of the funding in energy regulator Ofgem’s five-year plan will go towards maintaining gas networks, but £10.3bn will be used to strengthen the electricity transmission network.
Under the plan, households will see £108 added to their energy bills by 2031.
But Ofgem said the amount people pay for energy would increase by just £30 a year as the investment would help reduce reliance on imported gas and make wholesale energy cheaper.
Ofgem chief executive Jonathan Brearley said the investment would “keep the UK’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 stimulate economic growth and protect us from volatile gas prices,” he said.
Speaking before Ofgem’s announcement, Scottish Power’s chief executive Keith Anderson told the BBC’s Today program that the investment would also remove constraints on the system, meaning the company would not need to be paid to switch off wind turbines.
“This will be the biggest wave of investment in our electricity infrastructure since it was built by our ancestors in the 1950s, giving us a system that is fit for purpose for the country in the 21st century,” he said.
The five-year plan includes maintaining and expanding the network and moving away from dependence on volatile international gas prices.
Ofgem described this as a defining moment for Britain’s energy system; striking a balance between investing in the future and the cost to ratepayers.
Companies that operate energy networks, including power lines and cables, are separate from suppliers. They have monopolies in different parts of the country.
This plan sets out the framework for how to ensure a safe and secure supply and the cost controls they will face for five years from next year.
It also follows a government commitment in the Budget to remove certain costs, equivalent to around £150 from a typical annual bill.
