What the £28bn Grid Upgrade Means for Your Energy Bills

Big changes are coming to Britain’s energy networks and they could have an impact on household bills over the next few years. Ofgem, the energy regulator, has approved a major £28 billion investment package designed to modernise and strengthen Great Britain’s gas and electricity infrastructure. Here’s what’s happening, why it matters, and what it could mean for you. 

 A Major Upgrade to Britain’s Energy System 

Over the next five years, energy companies will be investing heavily in the systems that transport gas and electricity across the country. This includes: 

• £17.8bn to upgrade gas transmission and distribution networks 

• £10.3bn to expand and rewire the high-voltage electricity grid.

This is the largest expansion of the electricity grid since the 1960s and part of a wider £90bn investment pipeline due by 2030. More than 80 projects are planned, including new high-voltage cables and enhancements to existing infrastructure, all aimed at preparing the country for a cleaner, more resilient energy future. 

 Why These Upgrades Are Needed 

As the UK pushes toward becoming a 'green energy superpower', the current grid needs to be able to handle: 

• More renewable power 

• Greater regional demand 

• Reduced reliance on imported energy.

Upgrading the network will also help cut costs associated with 'curtailment', payments made to wind farms when the grid can’t take the extra power they produce. Ofgem says reducing these inefficiencies could save households around £80 compared with not upgrading the system. 

 How Will This Affect Your Energy Bill? 

Because these upgrades are funded through levies on bills, households will see some impact. Ofgem currently estimates: 

• Network charges will rise to £108 per year by 2031 

• This is slightly higher than the previous estimate of £104 

• Taken together with expected savings, the net impact is equivalent to around £30 extra per year, or £2.50 a month, by 2031.

Within this: 

• £48 supports gas network upgrades 

• £60 goes toward electricity grid improvements. 

While bills will rise slightly to support investment, the intention is to create a more secure, efficient and future-proofed energy system, ultimately helping to keep costs stable in the long term. 

 Consumer Protections and Accountability 

Ofgem has stressed that it will closely monitor how this money is spent. Network operators will only receive funds when they need them, and any unused money will be reclaimed. The regulator has already cut more than £4.5bn from the original spending requests to help keep costs in check. 

Jonathan Brearley, Ofgem’s CEO, emphasised the focus on value for money, saying the plans will help keep Britain’s network 'safe, secure and resilient'.

 What About Other Changes to Your Bill? 

There are other shifts happening alongside the network upgrade: 

• The Ofgem price cap will rise by 0.2% from January to March, adding £3 to a typical annual dual-fuel bill. 

• From April, the government plans to cut the average bill by £154, due to ending the Energy Company Obligation (ECO) levy and reducing contributions to the Renewables Obligation scheme. 

The Department for Energy Security and Net Zero has also confirmed additional support, including a £150 reduction in electricity bills next April. 

 What This Means Going Forward 

This investment marks a significant step toward a more modern, secure and low-carbon energy system. Energy companies, including Scottish and Southern Electricity Networks and National Grid, have welcomed the move, highlighting benefits such as: 

• Reduced reliance on overseas energy 

• Improved capacity to connect new renewable generation 

• More efficient, resilient infrastructure 

• Economic growth and new jobs within the energy sector.

While there will be modest increases in network charges, the long-term aim is to reduce system inefficiencies, support the transition to green energy, and create a more robust network that keeps costs as low as possible for consumers.