UK energy investment to raise household bills by £108 by 2031
A £28bn investment in the UK’s energy network will push up household bills by more than £100 by 2031, reports BritPanorama.
Announced by Ofgem on Thursday, £17.8bn will be allocated for maintaining gas networks, while £10.3bn will improve the electricity transmission network.
Overall, household bills are expected to increase by £108 by 2031, comprising £48 for gas and £60 for electricity.
However, Ofgem indicated that the actual increase in energy costs would be limited to £30 a year, as the investment aims to reduce UK reliance on imported gas and drive down wholesale energy prices.
Jonathan Brearley, Ofgem chief executive, emphasized that the funding is crucial for ensuring Britain’s energy network remains “among the safest, most secure and resilient in the world.”
“The investment will support the transition to new forms of energy and assist new industrial customers, driving economic growth and insulating us from volatile gas prices,” he stated.
Ofgem also committed to holding network companies accountable for timely and budget-compliant delivery of projects.
“We make no apologies for the efficiency challenge we’re setting as the industry scales up investment,” added Brearley.
He asserted that robust consumer protections are integrated into contracts, ensuring funds are only released when necessary and can be reclaimed if not utilized effectively. “Households and businesses must get value for money, and we will ensure they do,” he said.
The investment will fund 80 transmission projects and associated works across the UK over the next five years.
Ofgem stated that enhancing grid capacity through new power lines, substations, and advanced technologies will support millions of households and promote economic growth.
Investing in resilience and expanding grid capacity is deemed the most cost-effective approach to harnessing clean power, shielding consumers from gas price fluctuations, according to the regulator.
“[The] investment will upgrade power and gas grids, creating a future-ready system that better shields customers from volatile energy bills,” Ofgem concluded.
This substantial investment signals a pivotal shift in the UK’s energy strategy, aiming to enhance sustainability while managing costs for consumers. The delicate balance between immediate cost impacts and long-term benefits will be critical in gauging the success of this initiative.
