Energy grid investment of £28bn to push up household bills
The rise of household energy bills will help fund a £28 billion investment in the UK's electricity network. Ofgem, the energy regulator, has approved the investment in a five-year initiative to upgrade electricity and gas grids. The funds will be used to maintain gas networks and improve the electricity transmission network. By 2031, the work is expected to raise £108 to energy bills. However, Ofgem said people would end up saving about £80 more than they otherwise would, as the investment would reduce dependence on imported gas and make wholesale electricity cheaper, contributing to a net energy bill increase of around £30 per year.
Suppliers are not allowed to operate energy networks, including power lines, cables, and gas pipes. This strategy provides the foundation for how they produce a safe and secure supply, as well as the cost controls that they implement for five years starting next year. Jonathan Brearley, the founder of Ofgem, said the investment "will keep Britain's electricity network one of the world's most stable and resilient.
Mr Brearley, a BBC Breakfast presenter, said the UK must move away from its reliance on gas.
the president said,Gas has a huge role to play in our energy system for some time,
we must diversify our risk.We'll be much better at electricity prices in the future,
the diverging threat says,we'll get much more competitive at electricity rates in the years, which will save people Of the £108 Ofgem's that electricity bills will be included, £48 for natural gas and £60 for electricity will be charged. However, the regulator said the investment would result in about £80 worth of savings, including £50 in savings alone from the energy grid expansion. The £108 added to bills by 2031
will increase over the five years,Mr Brearley said,
so it's not all happening at once.It's about 2-3% on bills in April and it's likely that it will rises in a straight line from there.
Upgrading our gas and electricity networks after years of underinvestment is critical to keep the lights on and ensure energy stability for our region. " Energy bills remain relatively high, and are expected to rise marginally in January after Ofgem announced a small increase to its price cap, which would raise a typical household's bill by £3 a year. Ofgem's investment announcement comes as a result of a government promise to eliminate such expenditures from the Budget, which would save about £150 from a typical annual energy bill.A Department of Energy Security and Net Zero spokesperson said,
The investments approved by Ofgem include £17. 8bn for the gas network. That includes funds for cyber defense and gas pipe replacement. The £10. The electricity grid will be rebuilt, upgraded transmission lines, and reinforcing the grid so that electricity can be moved around the network. As the grid cannot take their electricity, the regulator also stated that the investment would eliminate inefficiencies in the system, such as offshore wind farms being paid billions a year to switch off. The electricity grid cannot cope with the amount of electricity generated by the UK's offshore windfarms at this time, as there aren't enough cables to transport it. Keith Anderson, the chief executive of Scottish Power, told the BBC that the removal of constraints in the system was crucial ahead of Ofgem's announcement.
he said,This will be the biggest wave of investment in our electricity system since its construction by our grandfathers in the 1950s,
the critical role that the gas transmission system plays in Britain's energy security now and for decades to come.it will provide us with a system that is fit for purpose for the 21st century. National Gas owns and operates Britain's gas transmission network, and the Ofgem scheme will provide government support. The investment, according to its CEO, Jon Butterworth, was applauded for the move, because it underscored
Last week's Budget review highlighted the need to de-stress these clients and the government's ability to continue investing in the most effective way possible while still providing more certainty and transparency on future spending,We'll do a more detailed analysis of Ofgem's decision to ensure that it delivers a safe, reliable network that safeguards Britain's electricity, maintains our industrial competitiveness, and promotes the country's renewable energy aspirations in the coming weeks. The increased investment, according to Energy UK chief executive Dhara Vyas, was vital, but the government needed to account for the additional expense for businesses and households.
no longer fit for purposeshe said. Charlie Kronick, Greenpeace UK's senior climate advisor, said that the energy grid was
and needed urgent, critical updates.This money must be invested efficiently, but not excessive returns,
he said.But, bill-payers must be covered with robust safeguards and robust oversight to shield bill-payments, and ensure that these updates deliver true value for money, not excessive return. End Fuel Poverty Coalition, a campaign group for Greenpeace, echoed GreenpeACE's concerns that network and transmission firms should not be given a blank cheque.
coalition co-ordinator Simon Francis said.These massive sums of essentially public money must be scrutinized and guaranteed for consumers,
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