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Ofgem: £12 on household energy bills rise for grid upgrade

Investment in improving UK distribution to add £12 for the next 8 years.

Households can expect to see an additional £12 added to their household energy bills as part of proposed measures to improve the UK’s gas and electricity networks.

In a press release today, energy regulator Ofgem said: “Britain faces an unprecedented need to invest to replace ageing infrastructure, meet environmental targets and deliver secure supplies. The increased investment needed to secure the robustness of the energy networks will have an impact on household bills.

“Including the proposals of the Scottish transmission companies and companies’ operating costs, it is estimated that annual household bills will increase by an average of £12 each year.

“This amount is not cumulative – for example at the end of the price control in 2021 bills will be around £15.10 higher than today.”

The surcharge will help to pay for a £24 billion upgrade of UK transmission systems, most notably the National Grid. However, the figure is £7.4 billion less than originally requested and could still be contested by the National Grid. The distribution network has previously been vocal in its criticism of Ofgem’s spending restrictions, saying that they did not do enough to promote companies to carry out the work.

It is expected to respond to Ofgem’s proposal by March.

The proposed upgrades are expected to create some 7,000 jobs in the supply chain.

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