Criticism arose towards regulatory watchdogs following the approval of a £28 billion deal for energy corporations, which is set to increase customer bills by almost £110 annually.
Ofgem, the industry regulator, has granted permission for companies to enhance and invest in their electricity and gas networks over the next five years.
These companies are allowed to recover the investment costs from customers, starting with a £40 increase in bills from next April, gradually escalating to £108 per year by 2031. However, these figures do not consider the anticipated savings from such extensive investments. Ofgem estimates that, factoring in these savings, the actual increase in 2031 per customer would be closer to £30.
The approved deal surpasses Ofgem’s initial proposal by £4 billion earlier this year, following pressure from industry lobbying. Ofgem stated that the investment would decrease the UK’s dependence on imported energy and eventually lead to cost savings for households.
Citizens Advice criticized the latest deal, highlighting that network companies have already made £4 billion in windfall profits over the last four years. Gillian Cooper, the director of energy at Citizens Advice, expressed concerns over the announced rise in energy bills, anticipating a £40 increase starting from April 2026, with further hikes in the future.
Simon Francis, the coordinator of the End Fuel Poverty Coalition, cautioned Ofgem about the risks of granting unchecked funding to network and transmission companies. He emphasized the necessity for proper scrutiny and consumer safeguards when handling such significant public funds.
Greenpeace UK’s senior climate advisor, Charlie Kronick, emphasized the importance of reducing energy costs for households and businesses as the transition to a cleaner energy system progresses. Kronick urged the government to intervene to ensure that the energy system prioritizes consumers over profits.
Dale Vince, the founder of Ecotricity, advocated for breaking the connection between wholesale gas prices and electricity prices to lower energy bills. Vince criticized Ofgem’s belief that increasing renewable energy on the grid, supported by these bill increases, would lead to reduced bills or insulation from volatile gas prices. He stressed the need to detach from global gas price influences to establish more stable pricing for green energy.
Andy Prendergast, the national secretary of the GMB union, welcomed the overdue investment in gas and electricity grids, emphasizing the importance of moving towards energy independence and making essential infrastructure decisions.
The companies increasing their investments primarily own power lines, cables, and gas pipes rather than being energy suppliers. Out of the total £28 billion, nearly £18 billion will be allocated to gas transmission and distribution networks, with an additional £10.3 billion earmarked for strengthening the UK’s high-voltage electricity network.
Households are expected to see a rise in network charges on their bills, contributing around a fifth of average annual energy costs, with a projected £108 increase by 2031 to cover the additional investment costs, up from the £104 rise estimated in the preliminary verdict in July.
Jonathan Brearley, Ofgem’s chief executive, highlighted that the investment would facilitate the transition to new energy forms, support industrial growth, and protect against fluctuating gas prices.
A government spokesperson emphasized the necessity of upgrading gas and electricity networks, essential for maintaining energy security and meeting the country’s energy needs.
Dhara Vyas, the chief executive of Energy UK, stressed the importance of increasing infrastructure investment to ensure the safety, reliability, and capacity of energy networks to meet future demands.
Ofgem has been scrutinizing energy companies’ proposals since the beginning of the year, making reductions of over £4.5 billion compared to the initial £33 billion plans. Following pressure from network firms, Ofgem increased the amount proposed in July to address additional electricity transmission development and infrastructure health concerns.
Ofgem highlighted that the investment would support 80 new power projects, enhancing the grid’s capacity to handle electricity flow from new renewable sources through new power lines, substations, and related technologies.
Scottish and Southern Electricity Networks, a subsidiary of SSE, emphasized that the investment would reduce reliance on imported energy, strengthen energy security, and stimulate economic growth and job creation across the UK.
National Grid, responsible for managing a significant portion of Britain’s electricity grid, welcomed Ofgem’s acknowledgment of the need for substantial investment