Ofgem, the UK’s energy regulator, has given provisional approval to a major £24 billion investment plan aimed at upgrading the country’s energy infrastructure and expanding renewable energy capacity, the agency announced Tuesday.

Spanning five years, the program allocates over £15 billion to maintain the safe operation of Britain’s gas transmission and distribution systems. Meanwhile, £8.9 billion is earmarked for enhancements to the high-voltage electricity network, with an additional £1.3 billion set aside for future deployment.

This investment marks the initial phase of a wider £80 billion initiative designed to expand the UK’s electricity network, shielding households from the volatility of global gas markets that have caused sharp energy bill fluctuations in recent years.

The funding will support about 80 transmission projects nationwide, upgrading more than 4,400 kilometers of overhead power lines and installing 3,500 kilometers of new circuits, including offshore grid connections. These upgrades will double the amount of grid infrastructure added over the past decade.

Jonathan Brearley, Ofgem’s CEO, stated, “This record investment will deliver a homegrown energy system that is better for Britain and better for customers. It will ensure the system has greater resilience against shocks from volatile gas prices we don’t control.”

Ofgem estimates the investment will add approximately £104 to annual household network charges by 2031 — with £30 attributed to gas networks and £74 related to electricity grid upgrades. However, the expansion of the electricity grid is expected to generate around £80 in savings through reduced constraint costs and improved renewable energy utilization, resulting in a net cost rise of about £24 per year, or less than 40 pence weekly, by March 2031.

The regulator has set a provisional cost of equity allowance for private investments at 6% over the five-year period, lower than the 6.5% to 6.9% range requested by companies in their proposals.

The draft approval is now open for public consultation, with final decisions expected by the end of 2025.

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