Energy network companies have been given the green light for multi-billion-pound funding to strengthen the stability, security and resilience of our energy networks. This investment will upgrade power and gas grids, creating a future-ready system that better shields customers from volatile energy bills.
Most of the funding (£17.8 billion) announced today will go towards maintaining Britain’s gas networks, keeping them among the safest, most secure and resilient in the world.
This essential investment ensures a safe and reliable energy system for years to come.
The remaining initial investment (£10.3 billion) will strengthen our electricity transmission network, improve reliability and expand capacity to support the electrification of the economy and drive growth.
Together this £28 billion commitment will rise to an estimated £90 billion by 2031 across both gas and electricity networks.
Investing now to maintain world class resilience and expand grid capacity is the most cost-effective way to harness clean power, support economic growthand protect the country from gas price shocks like the one seen in 2022.
As investment for ongoing operations, asset replacement and maintenance filters through to bills more quickly than investment in network expansion, these costs will add more to bills despite representing a smaller share of the overall £90 billion investment programme.
In total £108 will be added to bills by 2031. £48 for gas and £60 for electricity. Alongside maintaining grid resilience this investment will deliver significant savings of around £80 compared to not expanding the grid.
Electricity grid expansion alone is expected to reduce bills by £50 by 2031, thanks to lower reliance on imported gas and the halting of constraint costs ensuring power flows efficientlyfrom where it’s generated to where it’s needed, even at peak demand. In short, investing now is cheaper for consumers than delaying, and electricity grid investment more than pays for itself.
Overall the net increase in bills to cover all costs by 2031 will be around £30 or less than £3 per month with costs expected to fall further over time.
Jonathan Brearley, Ofgem CEO, said:
'The funding announced today will 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.
'But this is not investment at any price. 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 backi f not used. Households and businesses must get value for money, and we will ensure they do.'
Through 2025, the energy regulator has rigorously reviewed spending proposals from electricity transmission owners, National Gas, and the gas distribution companies, to ensure the best value for bill payers. We’ve set strict delivery targets, pushed companies to maximise efficiency, and rejected bids that do not serve consumers’ interests.
This scrutiny has delivered potential savings of over £4.5 billion (15%) against the initial £33 billion proposals.
The approved investment will fund 80 transmission projects and associated works nationwide over the nextf ive years. This will significantly increase grid capacity through new powerlines, substations and other technologies, to power millions of households with clean, secure, domestic energy and meet growing demand for economic growth.
Source: Ofgem
