£28bn Upgrade of Great Britain's Energy Grid Approved with Impact on Bills
Ofgem has approved a £28bn investment to upgrade Great Britain's gas and electricity grids over five years starting April 2026, encompassing more than 80 projects including new high-voltage cables and overhead-line upgrades. The package allocates approximately £17.8bn for gas transmission and distribution and about £10.3bn for the high-voltage electricity network, representing the largest grid expansion since the 1960s.
The funding will be raised through levies on household energy bills, with network charges expected to rise to around £330 per year by 2031, up from £222 today, an increase of roughly £108 per year. The final annual total could reach up to £338 due to backloading of cost increases, resulting in a net effect of about £30 more per year on bills by 2031, equivalent to around £2.50 per month.
This investment aims to improve energy security and support the UK government's plan to become a green energy superpower by the end of the decade. It is also expected to save around £80 on bills by preventing windfarm shutdown costs when the grid is overloaded. The current package forms part of a broader investment pipeline with total costs potentially reaching around £90bn if all projects proceed. Ofgem has already cut over £4.5bn from the initial £33bn plans.
Reactions to the investment vary: Ofgem chief executive Jonathan Brearley stated that the funding keeps the network safe and secure, while the Department for Energy Security and Net Zero (DESNZ) defends the upgrades. The chancellor noted that ending the Energy Company Obligation (ECO) and renewables obligation will reduce bills by about £154, though opposition parties criticized the cost implications. Other stakeholders such as National Grid and SSE welcomed the investment, Greenpeace urged for value for money, and the End Fuel Poverty Coalition called for consumer protections and close scrutiny of spending.
