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Ofgem has increased the allowed investment spend from the initial £24 billion that was provisionally given the go ahead in the summer.
Holly WilliamsThursday 04 December 2025 08:09 GMT
open image in galleryOfgem has increased the allowed investment spend (PA) (PA Archive)
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Britain’s energy watchdog has given the green light to an initial £28 billion of investment to upgrade UK energy infrastructure, but revealed the move will push up network charges on household bills by £108.
In its final verdict on price controls for energy network firms over the next five years, Ofgem has increased the allowed investment spend from the initial £24 billion that was provisionally given the go ahead in the summer.
It said the higher investment level will see £17.8 billion spent on gas transmission and distribution networks in the five years to 2031, with a further £10.3 billion used to strengthen the UK’s high-voltage electricity network.
But Ofgem said its decision to increase the allowed investment spend will push up household bills by more than first expected, before savings.
Households will see the network charges on bills – which make up around a fifth of average annual energy costs – surge by £108 by 2031 to cover the cost of the extra investment, up from the £104 rise estimated in its draft verdict in July.
The regulator said this will include £48 for gas networks and £60 for the electricity grid.
It comes after the latest energy price cap change was announced, which will see energy bills rise unexpectedly by 0.2% from January after increases to Government policy costs offset falling wholesale gas prices.
But the regulator insisted that bills would be even higher without the approved investment, while the funding will allow the UK to make savings through boosting the nation’s power generation and lowering reliance on imported gas.
It added that with savings of around £80 taken into account, the net increase to bills is expected to be around £30, or £3 a month, with costs expected to fall in future years as more renewable electricity generation will lower wholesale power costs.
Jonathan Brearley, chief executive of Ofgem, said: “The investment will support the transition to new forms of energy and support new industrial customers to help drive economic growth and insulate us from volatile gas prices.
“But this is not investment at any price.
“Every pound must deliver value for consumers.
“Ofgem will hold network companies accountable for delivering on time and on budget, and we make no apologies for the efficiency challenge we’re setting as the industry scales up investment.”
