Ofgem, the UK’s energy regulator, has approved a £24 billion investment in the country’s gas and electricity networks between 2026 and 2031. While aimed at future-proofing British energy infrastructure, this move is expected to increase household energy bills by around £104 per year by 2031—despite a falling price cap this summer.
⚡ What’s Behind the Increase?
- £8.9 billion will be spent boosting high-voltage electricity transmission lines, while £15 billion is earmarked for enhancements to gas networks.
- According to Ofgem’s analysis, the average household bill will rise by £104, broken down as £74 for electricity and £30 for gas annually by 2031 .
- Ofgem argues this is critical infrastructure investment to integrate more renewable energy, improve grid resilience against global price shocks, and avoid even higher bills in the future .
💬 Reaction from Ofgem
Ofgem’s CEO, Jonathan Brearley, commented:
“Doing nothing is not an option and will cost consumers more – this is critical national infrastructure. The sooner we build the network we need and invest to strengthen our resilience, the lower the cost for billpayers will be in the future.”
Brearley emphasised that cost control mechanisms are in place and that Ofgem would act to ensure the investment delivers value for consumers.
🎥 Watch: What This Means for Your Bill
A clear explainer on the network upgrade and its impact on household energy bills is available from financial news outlets and national broadcasts. The video outlines how infrastructure investment supports renewable energy integration and grid stability.
📈 The Trade-Off
Benefit | Annual Cost Increase |
---|---|
Increased investment in electricity grid | +£74 |
Upgrades to gas network | +£30 |
Total projected annual bill rise | +£104 by 2031 |
However, Ofgem expects overall consumer costs to remain close to current levels—around £24 more per year—due to efficiencies and competitive market dynamics within the broader £80 billion energy infrastructure programme.
📉 Price Cap vs. Network Costs
While investment-related costs rise, Ofgem has also approved a 7% reduction in the price cap for July–September 2025—dropping the typical domestic energy bill from £1,849 to £1,720 .
This juxtaposition means households may still see net savings this year, but pay more over the longer term due to infrastructure upgrades.
🧭 Why This Matters
- Energy security & resilience: A modern grid is essential to cope with future renewables and climate-related demand spikes.
- Renewable integration: Expanded transmission lines are crucial for UK offshore wind, solar farms, and future hydrogen power schemes.
- Consumer protection: Ofgem frames the investment as “doing now to save later,” emphasising long-term gains over short-term costs.
🔮 What Lies Ahead
- October cap review: Cornwall Insight predicts a further £22 drop, to £1,698, but warns overall bills remain elevated compared to pre-2021 norms .
- Consumer advice: Ofgem continues to urge households to shop around, switch to fixed-rate deals, and submit accurate meter readings, especially before cap changes occur .
- Infrastructure updates: The planned upgrades include 1,000 km of new onshore cables and 4,500 km offshore connections by 2030, aligning with net-zero targets.
✅ Final Thoughts
UK energy bills are getting a push-pull effect: short-term relief via a falling price cap against moderate long-term rises to fund necessary upgrades. As Ofgem frames it, the strategy is forward-facing and vital for dispatching renewable power while protecting against volatile