UK energy regulator Ofgem has unlocked £28bn investment to maintain a safe, secure and resilient energy grid and to upgrade and expand capacity to meet growing demand.

Energy companies have been given the green light for multi-billion-pound funding to strengthen the stability, security and resilience of their networks. This investment will upgrade power and gas grids, creating a future-ready system that better shields users from volatile energy bills.

Most of the funding (£17.8bn) will go towards maintaining Britain’s gas networks, keeping them among the safest, most secure and resilient in the world. This essential investment should ensure a safe and reliable energy system for years to come.

The remaining initial investment (£10.3bn) will strengthen the electricity transmission network, improve reliability and expand capacity to support the electrification of the economy and drive growth.

This £28bn commitment will rise to an estimated £90bn by 2031 across gas and electricity networks.

Ofgem says investing now to maintain world class resilience and expand grid capacity is the most cost-effective way to harness clean power, support economic growth and protect the country from gas price shocks like the one seen in 2022.

As investment for ongoing operations, asset replacement and maintenance filters through to bills more quickly than investment in network expansion, these costs will add more to bills despite representing a smaller share of the overall £90bn investment programme.

In total, £108 will be added to bills by 2031; £48 for gas and £60 for electricity. Alongside maintaining grid resilience, this investment should deliver significant savings of around £80 compared with not expanding the grid.

Electricity grid expansion alone is expected to reduce bills by £50 by 2031, thanks to lower reliance on imported gas and the halting of constraint costs ensuring power flows efficiently from where it is generated to where it is needed, even at peak demand. In short, says Ofgem, investing now is cheaper for consumers than delaying, and electricity grid investment more than pays for itself.

Overall, the net increase in bills to cover all costs by 2031 will be around £30 or less than £3 per month with costs expected to fall further over time.

“The funding will keep Britain’s energy network among the safest, most secure and resilient in the world,” said Jonathan Brearley, Ofgem (www.ofgem.gov.uk) CEO. “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. We’ve built strong consumer protections into these contracts, meaning funds will only be released when needed and clawed back if not used. Households and businesses must get value for money, and we will ensure they do.”

Through 2025, the energy regulator has rigorously reviewed spending proposals from electricity transmission owners, National Gas (www.nationalgas.com) and the gas distribution companies, to ensure the best value for billpayers. It has set strict delivery targets, pushed companies to increase efficiency and rejected bids that do not serve consumers’ interests. This scrutiny has delivered potential savings of over £4.5bn (15%) against the initial £33bn proposals.

“Over the past few months, our teams have worked extensively and constructively with Ofgem to provide additional evidence on the case for further investment in Britain’s national gas network to safeguard our country’s energy security and deliver benefits for consumers,” said Jon Butterworth, National Gas CEO. “In the coming weeks, we will undertake a more detailed review of Ofgem’s decision to ensure it enables us to deliver a safe, resilient network that secures Britain’s energy, maintains our industrial competitiveness and supports the country’s clean energy ambitions.”

The approved investment will fund 80 transmission projects and associated works nationwide over the next five years. This will significantly increase grid capacity through new power lines, substations and other technologies, to power millions of households with clean, secure, domestic energy and meet growing demand.