Britain’s energy regulator Ofgem has approved a £28 billion ($37.33 billion) investment plan for the next five years to maintain a safe and reliable energy system, an upgrade that is expected to add £108 to consumer bills by 2031.
The approved amount is higher than Ofgem’s initial July estimate of £24 billion and comes despite government promises to reduce energy prices.
“This investment will support the transition to new forms of energy, help new industrial customers, drive economic growth, and insulate us from volatile gas prices,” Ofgem CEO Jonathan Brearley said on Thursday.
Under the UK regulatory system, gas and electricity network operators submit investment plans to Ofgem, which then evaluates projected costs. These costs are ultimately passed on to consumers through network charges, currently accounting for nearly 25% of the average household energy bill.
The Department for Energy Security and Net Zero said the investment was vital to ensuring energy security and preventing blackouts.
SSE, owner of Scottish and Southern Electricity Networks Transmission, welcomed the revised package and said it would review the details in the coming weeks. National Grid also praised the decision, saying it recognised the need for major investment as the volume of power transport is expected to double.
Campaigners from the End Fuel Poverty Coalition acknowledged the need for a stable energy system and expanded renewable capacity but cautioned against giving network companies a “blank cheque.”
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