Home News UK’s Energy Bills Set to Increase to Fund Infrastructure Upgrades

UK’s Energy Bills Set to Increase to Fund Infrastructure Upgrades

by Dave

The UK faces a potential energy crisis within a decade if more improvements aren’t made to the nation’s existing infrastructure. With Britons becoming more demanding of energy than ever before, large increases in the sources of electricity and gas are needed.

Investment has already begun in this essential area, and it looks increasingly likely that we’ll avoid the intermittent blackouts that we were warned of as recently as a few years ago. Whether this was prudent advice, fear-mongering or simply a wrong assessment, changes are being made to the UK’s energy networks.

Ofgem, which is responsible for the regulation of the UK’s gas and electricity providers, has laid out a plan for upgrades to Britain’s energy infrastructure, including the creation and connection of offshore wind farms, installation of new power lines to bolster the national grid, and improvements to the country’s ability to transfer gas from offshore fields.

Because distribution makes up such a large percentage of what appears on an energy bill (around 20% with most suppliers) and these improvements will be funded by the energy companies, Ofgem has warned consumers that they will likely see an increase of £7 in their annual energy bill next year, and as much as £15 extra each year by the next decade.

However, National Grid, Britain’s most influential energy network, have said that Ofgem has severely underestimated how much these improvements will cost, arguing that the work required will cost far more than Ofgem’s figures show. Whilst Ofgem believes £22bn will be enough, National Grid is saying £30bn is required.

Whoever is proved right in the end, consumers will find that the cost of these upgrades is passed on to them.

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