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Investing.com -- Britain’s energy regulator Ofgem has approved a £28 billion investment to strengthen and expand the country’s energy networks, with funding set to rise to an estimated £90 billion by 2031.
The investment package allocates £17.8 billion to maintain Britain’s gas networks and £10.3 billion to strengthen the electricity transmission network, according to Ofgem’s announcement on Thursday.
This funding aims to keep Britain’s energy infrastructure "among the safest, most secure and resilient in the world" while expanding capacity to support economic growth and the transition to cleaner energy sources.
Ofgem CEO Jonathan Brearley emphasized that the investment would help insulate Britain from volatile gas prices, but stressed that "every pound must deliver value for consumers."
The regulator has built consumer protections into the contracts, ensuring funds will only be released when needed and can be clawed back if not used. Ofgem’s scrutiny of initial proposals has already delivered potential savings of over £4.5 billion, representing a 15% reduction from the original £33 billion requested.
The approved investment will fund 80 transmission projects nationwide over the next five years, significantly increasing grid capacity through new power lines, substations, and other technologies.
For consumers, the investment will add £108 to energy bills by 2031 - £48 for gas and £60 for electricity. However, Ofgem projects that grid expansion will deliver significant savings of around £80 compared to not expanding the network, resulting in a net increase of approximately £30 by 2031, or less than £3 per month.
Electricity grid expansion alone is expected to reduce bills by £50 by 2031 through lower reliance on imported gas and elimination of constraint costs.
For businesses, the investments will help strengthen productivity and resilience, with energy-intensive industries potentially seeing bills 10-15% lower than they would have been without the investment.
The funding is part of Ofgem’s Final Determinations for the cost control period from 2026 to 2031, known as RIIO-3.