UK households are expected to face higher energy bills after Ofgem signed off a £28bn programme to modernise and expand the country’s electricity and gas networks. The regulator’s five-year plan, starting next year, will fund upgrades to ageing gas infrastructure and major improvements to the power grid. These changes are projected to add around £108 to annual bills by 2031, with £48 linked to gas and £60 to electricity.
Ofgem argues that despite the upfront cost, consumers will ultimately benefit. By reducing reliance on imported gas and enabling cheaper domestic energy generation, the investment is forecast to deliver savings of roughly £80, leaving a net rise of about £30. Chief executive Jonathan Brearley said the upgrade will help keep the UK’s energy system “safe, secure and resilient”, while also supporting the transition towards a more diverse and stable power supply.
The regulator highlighted that constraints in the current grid are costing bill-payers billions, with offshore wind farms often paid to switch off because the network cannot absorb their output. Industry leaders, including Scottish Power’s chief executive Keith Anderson, described the initiative as the most significant overhaul of the electricity system since the 1950s and essential for meeting future demand.
National Gas, which operates the UK’s gas transmission network, welcomed the long-term commitment, while environmental groups urged strict oversight to ensure value for money. The announcement follows a government pledge to remove certain charges from bills, equivalent to around £150 a year.
