Households in every corner of the UK are set to face huge increases in their energy costs. Ofgem has already approved spending plans well over £17.8 billion to ensure the continued claim gas transmission and distribution networks. The funding will be raised through levies on household energy bills. This ongoing initiative is designed to improve our nation’s energy infrastructure in a safe and efficient manner.
The newly approved investments are expected to increase household energy bills by an estimated £30 per year by 2031. This means a higher charge of about £2.50 per month. In total, these improvements will increase £108 to network charges during the same time. £48 of the new charges will go towards improvements within the gas network. At the same time, £60 of the same fee will go directly towards upgrading the electricity grid.
At the same time, the UK government will invest a total of £10.3 billion to upgrade the high-voltage electricity system. This funding will go a long way toward improving our system’s foundation. Together, this ambitious project will mark the largest expansion of the Eastern Interconnection’s grid since the 1960s. It launches the initial stage of a proposed £80 billion upgrade of the nation’s power transmission network. Further upgrades will bring in new high-voltage power cables, as well as repair and replace existing overhead wires. That’s good news for more than 80 of the projects competing for this funding.
All of these advances go hand-in-hand with the UK government’s goal of becoming a green energy superpower. They plan to do so by the end of this decade. Climate-related fiscal risks Jonathan Brearley, the chief executive of Ofgem, said these investments are vital to securing a reliable energy network.
“The funding announced today will keep Britain’s energy network among the safest, most secure and resilient in the world.” – Jonathan Brearley
To hold industry’s feet to the fire, Ofgem has incorporated robust consumer protections in these contracts. Brearley stated that Ofgem will hold network companies accountable for delivering projects on time and within budget.
“Ofgem will hold network companies accountable for delivering on time and on budget … 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.” – Jonathan Brearley