£28bn Green Light: Ofgem Sets Out Blueprint for a More Resilient UK Energy Grid
Britain’s energy regulator has approved a major wave of investment to upgrade and expand the country’s power and gas networks, aiming to strengthen resilience, prepare for rising electricity demand and protect households from future price shocks. The plans, announced by Ofgem, unlock £28 billion of initial funding from 2026 to 2031, with total network spending expected to reach around £90 billion over the decade.
Most of the funding will go into Britain’s ageing gas infrastructure, with £17.8 billion set aside for maintenance, repairs and safety upgrades. Officials say this will help keep the UK’s gas network among the safest and most reliable in the world, even as gas consumption gradually falls over time. The remaining £10.3 billion focuses on expanding electricity transmission, adding new power lines, substations and technologies needed to bring clean energy to homes and businesses.
Price Rises Now, Bigger Savings Later
The regulator acknowledges that the investment will raise bills in the near term—an uncomfortable message at a time when Labour has pledged to bring energy prices down. Ofgem estimates that by 2031, a typical dual-fuel bill will be around £108 higher (£48 for gas and £60 for electricity) as the cost of upgrading networks feeds through more quickly than usual.
But the regulator argues that the alternative—delaying or scaling back investment—would result in even higher costs later. Upgrading the grid reduces waste, cuts reliance on imported gas and lowers the expensive “constraint costs” that have surged as more renewable projects try to connect to bottlenecked parts of the system. When these savings are factored in, Ofgem expects the net impact to fall to around £30 by 2031, or less than £3 a month.
Electricity grid expansion alone is expected to reduce bills by roughly £50, as smoother power flows cut back on the compensation payments made to wind farms when the grid is too congested to accept their output. Ofgem’s central message is blunt: without these upgrades, consumers would pay more—not less—in the long run.
A Grid Ready for Electrification and Growth
Behind the investment is a stark reality: Britain’s electricity demand is set to surge. As more homes adopt heat pumps, more drivers switch to electric vehicles and more industries transition to clean power, the UK will need a grid that can handle far higher loads than today.
At the same time, a rapid build-out of data centres—fuelled by cloud computing, AI models and high-performance computing—is creating entirely new clusters of extremely energy-hungry sites. These facilities can require as much power as a small town, and many of them have already faced multi-year delays because the grid simply cannot connect them fast enough.
Ofgem’s £10.3 billion package for electricity transmission will support 80 major projects nationwide, adding new lines, substations and technologies to move clean electricity quickly and reliably. Faster connections will be vital not only for energy-intensive sectors such as steel, chemicals and manufacturing, but also for digital infrastructure and new industries that depend on stable, abundant power.
For businesses, Ofgem believes that a stronger grid could cut long-term electricity costs by 10–15% compared with a future where upgrades are postponed—largely through lower wholesale prices and fewer network constraints.
A Long-Term Bet on Security and Clean Power
Ofgem’s decision underlines a wider shift: the UK’s future energy system must support more people, more digital services, more electrified transport and heating, and far more domestic clean power than the network was ever designed for. The upfront costs are visible; what is less visible is the price of standing still—greater exposure to volatile gas markets, mounting constraint costs, and a growing mismatch between electricity demand and the grid’s ability to deliver it.
In Ofgem’s view, investing now means avoiding larger shocks later. For households, the message is not that prices will fall immediately, but that a stronger, modernised grid offers the most reliable path toward long-term stability, lower volatility and a cleaner energy system that works at the scale Britain will soon require.