Ofgem the UK energy regulator, announced a major investment in the country’s electricity and gas networks of the sum of £24.2 billion over the next 8 years.
It will raise annual household energy bills by an average £12 each year, but by 2012 when the current price control period ends, consumer bills should be just over £15 more than they are today.
Ofgem say that it has cut £7 billion from network companies original spending requests, to make sure it keeps bill increases as low as possible and represented “value for money for customers”.
The proposals lay out £19.7 billion for grid upgrades between 2013 and 2021, with an additional £4.5 billion investment that can be released only if energy companies are able to justify the expenditure.
The package earmarks £15.5 billion to update the high voltage electricity network in England and Wales, together with the high pressure gas network across Britain, both of which are operated by National Grid.
New sources of energy generation will be added to the network and a sub-sea link to connect Scotland to England and Wales will be built.
The proposals mean that the total costs of running and maintaining the energy networks in the UK up to 2021 will be 38.2 billion.
The chair of Ofgem, Lord Mogg said that the proposals would attract “the energy infrastructure investment that Britain needs at a fair price”.