Ofgem has approved a rise in energy bills to support a £28 billion investment in the energy grid. For energy-focused people investment planning in Cheshire and Oswestry, the funding is for a five-year plan to overhaul the gas and electricity networks.
The upgrade is predicted to add around £108 to utility bills by 2031. The energy regulator said people will save an additional £80 in the longer run.
It said improved network capacity will facilitate faster connections for industrial projects. Electrification is required to fulfil government targets and boost regional economic development. Ofgem insists that natural gas is still an important part of the energy mix and will continue to generate electricity and to power industry.
The approved investment is set to finance 80 transmission projects and related works. Strategically, it is aimed at lessening the reliance on gas imports, whilst making wholesale energy prices cheaper. The government says that diversifying supply is crucial to maintaining energy security and keeping utility bills down.
It is hoped that energy-intensive industries will see bills drop by 10%-15%. The upgrade will also include circa £20 million in funding for biomethane. A recent study by consulting firm Sia found that Europe’s biomethane sector has expanded significantly in recent years. Capacity in the EU increased by 37% from 2023 to 2024. With the UK still lagging behind its neighbours, there is potential there for further growth.
Ofgem’s CEO, Jonathan Brearley, said that the investment will speed up the transition to diversified energy, boost economic growth and protect consumers from fluctuating gas prices.
