Ofgem Unveils £24 Billion Grid Modernization Plan
The UK’s energy regulator has approved a £24bn investment to upgrade the UK’s energy infrastructure as a part of its green transition.
The Office of Gas and Electricity Markets (Ofgem) move comes as the government renews its push for cleaner energy, despite backlash around the impact on prices.
Over £15bn is set to be deployed into the UK’s gas transmissions and distribution systems to ensure a “safe and secure” supply of gas to households and businesses.
Meanwhile, £8.9bn will be spent on expanding Britain’s high-voltage electricity grid in its largest update since the 1960s. The regulator said another £1.3bn injection is set for the grid.
City AM revealed earlier this month the government had quietly admitted using low-carbon technologies, which are essential to the rapid drive to net zero, were more expensive than when fossil fuels are used as an energy source.
The fresh investment is the first part in an £80bn programme which aims to boost the electricity network across the country. The plans also seek to protect UK households from the volatility of international gas markets that have drastically impacted energy bills in recent years.
Ofgem eying UK’s energy independence
UK energy prices have soared amid rising geopolitical uncertainty. Russia’s invasion of Ukraine in 2022 spiked prices to record highs and pushed the average household energy bill to nearly £4,000 a year, ahead of government subsidies, subsequently triggering the cost-of-living crisis.
The initial spike in oil prices as conflict intensified in the Middle East also led to heightened concerns energy prices could be hit.
Ofgem said investment in the electric grid will rise to around four times the current spending levels, allowing for 80 transmission projects and all associated works to be completed within five years.
The programme is hoped to significantly increase the grid’s capacity through the construction of new power lines, substations, and other technologies.
The government doubled down on green ambitions on Monday as the City minister reaffirmed plans to drive sustainable finance in the Treasury’s upcoming financial services strategy.
By City AM
