UK consumers face higher energy bills after regulator approves $37 billion grid upgrade

The British Energy Regulator has approved an investment of 28 billion pounds ($37.33 billion), over the next five-years, to ensure that the energy system is reliable and safe in the future. This is part of a plan to upgrade the energy system which will increase consumer bills by 108 pounds per year.

The investment exceeds the provisional estimate of 24 billion pounds made by regulator Ofgem back in July, despite the British Government's promise to lower energy prices.

Jonathan Brearley, Ofgem's CEO, said that the investment would support the transition to alternative energy sources and help support new industrial clients to drive economic growth. It will also insulate us against volatile gas prices.

Ofgem, the British regulator, assesses project plans, expected costs and investment by gas and electricity companies.

The investment is paid for by the consumer through network charges. These charges currently account for almost a quarter on average of their household's energy bill.

On Thursday, the Department for Energy Security and Net Zero said that the investments are essential for keeping the lights on and ensuring energy security.

SSE, the company that owns Scottish and Southern Electricity Networks Transmission (SSE), said it was pleased with the changes made to Ofgem’s initial proposals. It will be reviewing and assessing the price control package over the next few weeks.

National Grid has also welcomed this decision. It said that it recognises the need to invest in order to maintain reliable operations, with the amount of electricity transport expected to double.

End Fuel Poverty Coalition campaigners said that they too recognized the need for a reliable supply of energy and to help households benefit from more renewable energies generation.

They said: "But this shouldn't be interpreted as signing a blank check for the network and transmission companies."

(source: Reuters)