Consumers to foot bill as Ofgem green lights £28bn energy grid upgrade

(Sharecast News) - Britain's long-suffering energy customers face yet another hike in their bills after industry regulator Ofgem approved a £28bn plan to upgrade the electricity grid.

Most of spending - around £17.8bn - will be used to maintain Britain's gas networks, with £10.3bn to improve the nation's high-voltage electricity network. All in all it is a £4bn increase on the provisionally plan approved in the summer.

Ofgem said the plan would protect the country from a repeat of the 2022 gas price shock when Russia launched its unprovoked invasion of Ukraine.

Consumers will foot the bill for the expansion, with £108 added to bills per year by 2031.

Environmental campaign group Greenpeace broadly welcomed the announcement, saying the current grid was no longer fit for purpose, but warned the money must be spent "effectively ... with robust safeguards and strong regulation to protect bill-payers, and ensure these upgrades deliver genuine value for money, offering fair but not excessive returns".

"We hope Ofgem have, and will continue to, strain every sinew in ensuring that new technologies of storage and flexible demand are adopted to minimise costly upgrades," said Greenpeace UK's senior climate advisor, Charlie Kronick.

"Energy costs are a major pressure on households and businesses and, as we move to a cleaner energy system, prices must eventually come down. The government should be prepared to step in to ensure our energy system works for billpayers, not profits."

Energy provider SSE said the will help reduce reliance on imported energy from overseas, "remove grid bottlenecks and strengthen energy security, as well as acting as a major catalyst for economic growth, jobs and supply chain investments across the UK to unlock the country's full potential".

"Based on an initial assessment, SSEN Transmission welcomes improvements to baseline total expenditure and notes the updates to Ofgem's proposed financial parameters and incentive regime. However, a detailed assessment is required to determine the overall investability of the package."

"With more material to be released by Ofgem over the next few days, SSEN Transmission will review and assess the price control package in its entirety over the coming weeks, including the proposed licence changes due to be consulted upon shortly."

Reporting by Frank Prenesti for Sharecast.com