Ofgem promises major green investment in electricity network without bill rises

The controls will run from April next year until 2028 and are focused on driving the move away from importing fossil fuels and relying on expensive gas.

Grid capacity will also be boosted in order to pave the way for cheaper greener energy as more products become reliant on electricity.

The businesses include Southern England’s UK Power Networks and SP Energy Networks in southern Scotland, among others.

They will need to invest a total of £22.2bn between 2023 and 2028 to help Britain prepare for a future where more homes and businesses opt for electric cars and heating.

The potential of renewable energy sources such as wind, solar, and wave power require changes in the way energy is used and stored to gain their benefits. The price controls set out by Ofgem will allow for the scale of investment required without adding to customers’ bills, the regulator said.

While the cost of the work is recouped through the network charges on consumer bills, limits on network profits and increased efficiencies, the funds will remain at an average of £100 per year per bill-payer, despite the increased investment.

Akshay Kaul, Ofgem’s interim director, said: “The investment set out today delivers value for consumers, safeguards security of supply and helps ensure Britain is no longer at the mercy of international energy prices or geopolitical events.

“We’ve set the initial amount of investment that local electricity distribution network operators can make in the 2023 to 2028 period, with every pound representing value for money for consumers and no increase in bills.

“The economics of energy have shifted with home-grown cleaner renewables like wind and solar energy proving cheaper than costly imported gas. Together with more nuclear and potentially hydrogen-fuelled power, these renewables will contribute to a lower- carbon energy mix, better protected from geopolitical events and energy price shocks.

He added: “These new low-carbon sources of generation will also need to be connected to an expanded electricity network to meet the growing demand for electricity with millions more electric heat pumps in homes and electric vehicles (EVs) on the road expected over the coming years.

“We’ve carefully considered all the work that will be required and set the budget for the networks, accordingly, driving the increase in capacity needed for net zero as well as delivering more reliable and resilient networks, at no extra cost to consumers.”