Britain’s energy regulator Ofgem has approved a £28 billion investment to expand the nation’s grid capacity, a move set to lift average household network charges by less than £3 per month by 2031 while promising long-term savings.
Ofgem Finalizes Major Grid Investment Plan
Ofgem energy said Thursday it granted final approval for the multibillion-pound overhaul, raising its earlier provisional estimate of £24 billion. The regulator said the investment aims to modernize infrastructure, connect more renewable power and enhance reliability as the country accelerates its transition to cleaner energy.
“The grid must be ready for rising electricity demand, and this investment delivers that readiness,” an Ofgem spokesperson said. “We expect the benefits to outweigh the upfront costs for consumers.”
Ofgem energy noted that the decision followed months of technical reviews and industry consultations with major operators including National Grid PLC, Iberdrola SA’s ScottishPower unit and SSE PLC.
Bills Set To Rise Slightly As Savings Offset Higher Costs
The regulator said the upgrades would originally have increased the average household bill by about £104 a year by 2031, based on its July estimate. But the approved plan trims that impact through efficiency gains expected as new grid links reduce congestion and lower constraint costs.
Ofgem energy said it is now targeting annual savings of around £80 once the expanded grid is operational. With those savings factored in, the net bill increase falls to about £30 a year by 2031, or under £3 per month. The regulator added that costs should decline beyond 2031 as the system becomes more efficient.
“This is a necessary step to keep the lights on and integrate more low-cost renewables,” said Emma Pinchbeck, chief executive of Energy UK, the industry’s trade body. “Consumers ultimately benefit from a stronger, more flexible network.”
Energy analysts said the financial impact appears modest given the scale of the investment. “A grid built for the future won’t come free, but the projected monthly increase is relatively small,” said Raj Singh, an independent energy economist. “The savings Ofgem anticipates will be key.”
Industry Calls Upgrade Critical to Meeting Climate Goals
Utilities welcomed the decision, saying the investment is essential to meet Britain’s climate commitments and ensure the grid can handle rising demand from electric vehicles, heat pumps and renewable generation.
National Grid said it stands ready to move forward with planned projects aimed at boosting capacity and reducing bottlenecks. SSE said the approval underscores the urgency of reinforcing transmission lines across the country.
Ofgem energy said construction on several projects will begin next year, with others scheduled through the end of the decade. The regulator said rigorous oversight will ensure companies deliver upgrades on time and within approved budgets.
“This package supports the government’s broader energy strategy,” the Ofgem spokesperson said. “A modern grid is foundational to security, affordability and the transition to net zero.”
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