Image: National Grid
Britain’s energy regulator Ofgem has given the provisional green light to an initial £24 billion ($33 billion) investment programme to upgrade and maintain the country’s energy networks.
Ofgem approved the spending over the RIIO-3 period between 2026/27 and 2030/31.
The lion’s share of the investment will see over £15 billion ($20.6 billion) ensure the continued safe operation of the gas transmission and distribution networks.
For electricity networks, £8.9 billion ($12.2 billion) in initial funding has been approved for the electricity transmission sector to upgrade the power grid, with immediate access to a further £1.3 billion ($1.8 billion) of ‘use it or lose it’ investment.
The draft settlement, says Ofgem in a release, is the first step in an estimated £80 billion ($110 billion) investment programme over the five-year period.
This includes £4.2 billion ($5.8 billion) for National Grid Electricity Transmission, £3.1 billion ($4.3 billion) for SSEN and £1.6 billion ($2.2 billion) for Scottish Power.
According to Ofgem, the investment will allow for 80 transmission projects and all associated works across the country to be completed over the five years. This will increase the grid’s capacity through new power lines, substations and other technologies to handle the flow of electricity from new renewable sources.
National system operator NESO estimates the 80 projects will cut constraint costs threefold and leave 5% power from unabated gas use by 2030. According to Ofgem, the decision means any project not already approved or in delivery will now progress to their next stage of development.
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These projects will upgrade over 4,400km of overhead lines and deliver 3,500km of new circuits, including investments offshore, doubling the total build in the last 10 years.
It means up to 126GW of clean power generation will be connected to the grid by 2030 alongside additional flexible storage and technologies.
Commenting in a release was Ofgem CEO Jonathan Brearley: “This record investment will deliver a homegrown energy system that is better for Britain and better for customers.”
Brearley called the 80 projects a long-term insurance policy for the country’s energy security and against the instability of prices
“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 bill payers will be in the future. ”
Ofgem’s approval comas after six months of scrutinising spending proposals from the electricity transmission owners, National Gas, and the gas distribution companies.
Strict emphasis, says the regulator, has been put on delivery targets while pushing companies to be as efficient as possible.
The draft determinations are now published for consultation with final decisions to be made by the end of 2025.
