Regulator Ofgem said the £28 billion investment will upgrade power and gas grids, creating a future-ready system that better shields customers from volatile energy bills.

Most of the funding (£17.8bn) announced today will go towards maintaining Britain’s gas networks, keeping them among the safest, most secure and resilient in the world.

The remaining initial investment (£10.3bn) will strengthen the electricity transmission network, improve reliability and expand capacity to support the electrification of the economy and drive growth.

Together, the £28bn commitment will rise to an estimated £90bn by 2031 across both gas and electricity networks.

In total, £108 will be added to bills by 2031. £48 for gas and £60 for electricity. Alongside maintaining grid resilience this investment will deliver significant savings of around £80 compared to not expanding the grid.

Electricity grid expansion alone is expected to reduce bills by £50 by 2031, thanks to lower reliance on imported gas and the halting of constraint costs ensuring power flows efficiently from where it’s generated to where it’s needed, even at peak demand. In short, investing now is cheaper for consumers than delaying, and electricity grid investment more than pays for itself.

Overall the net increase in bills to cover all costs by 2031 will be around £30 or less than £3 per month with costs expected to fall further over time.

Jonathan Brearley, Ofgem CEO, said: “The funding announced today will keep Britain’s energy network among the safest, most secure and resilient in the world. The investment will support the transition to new forms of energy and support new industrial customers to help drive economic growth and insulate us from volatile gas prices.

“But this is not investment at any price. Every pound must deliver value for consumers. Ofgem will hold network companies accountable for delivering on time and on budget, and we make no apologies for the efficiency challenge we’re setting as the industry scales up investment.

“We’ve built strong consumer protections into these contracts, meaning funds will only be released when needed and clawed back if not used. Households and businesses must get value for money, and we will ensure they do.”  

The approved investment will fund 80 transmission projects and associated works nationwide over the next five years.