Criticism arose as watchdogs approved a £28 billion agreement for energy companies, leading to an approximate yearly increase of £110 for customers.
Ofgem, the industry regulator, has granted permission for energy firms to enhance and invest in their electricity and gas networks over the next five years.
These companies will recover the investment from customers, starting with a £40 increase in bills from April and escalating to £108 annually by 2031. Ofgem anticipates that, factoring in the anticipated savings from such extensive investment, the 2031 increase will be closer to £30 per customer.
The approved deal exceeds Ofgem’s earlier proposal by £4 billion following lobbying from the industry. Ofgem argues that this investment will decrease the UK’s dependence on imported energy and eventually result in savings for households.
Citizens Advice highlighted that network companies have already gained windfall profits of £4 billion over the past four years. Gillian Cooper, the director of energy at Citizens Advice, stated that energy bills are set to rise by approximately £40 from April 2026, with further increases expected in the future.
Simon Francis, the coordinator of the End Fuel Poverty Coalition, cautioned that Ofgem is risking giving a blank check to network and transmission companies. He emphasized the necessity for proper scrutiny and consumer guarantees given the significant public funds involved.
Charlie Kronick, senior climate advisor at Greenpeace UK, emphasized the need for energy costs to decrease as the transition to cleaner energy systems progresses. He called for government intervention to ensure that the energy system prioritizes consumers over profits.
Dale Vince, founder of Ecotricity, suggested breaking the connection between wholesale gas prices and electricity prices as a key strategy to lower energy bills. He criticized the current system that allows network operators to increase bills without adequate investment in network infrastructure.
Andy Prendergast, national secretary of the GMB union, welcomed the overdue investment in gas and electricity grids, highlighting the potential benefits for energy independence and economic growth.
The investment will primarily focus on upgrading power lines, cables, and gas pipes to enhance the UK’s energy infrastructure. Approximately £18 billion will be allocated to gas transmission and distribution networks, while £10.3 billion will be dedicated to strengthening the high-voltage electricity network.
Households can expect a rise of £108 by 2031 in network charges, which constitute about one-fifth of average annual energy costs, to cover the additional investment expenses.
Jonathan Brearley, Ofgem’s chief executive, emphasized that the investment will facilitate the transition to new energy forms and support industrial growth while safeguarding against fluctuating gas prices.
Government officials highlighted the necessity of upgrading gas and electricity networks after years of insufficient investment to ensure