British households will see their energy bills increase by more than £100 over the next five years to fund a major upgrade of the nation's power networks, the regulator has confirmed.
Ofgem's £28 Billion Infrastructure Plan
The energy regulator, Ofgem, has approved an additional £28 billion of investment to modernise the UK's ageing energy infrastructure. The plan, announced on December 4, 2025, will see £17 billion spent on gas transmission and distribution networks, with a further £10 billion allocated to high-voltage electricity networks over the next five years.
Jonathan Brearley, chief executive of Ofgem, stated: ‘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.’
Impact on Household Bills
This substantial investment will be paid for by consumers through increased network charges, which make up roughly a fifth of a typical annual energy bill. Ofgem confirmed that by 2031, the average household will pay an extra £108, bringing the total annual network charge to £330.
The increase breaks down as £48 for gas networks and £60 for the electricity grid. However, Ofgem insists that bills would be even higher without this approved investment. When savings of around £80 are factored in, the net increase is expected to be closer to £30, or about £3 per month, with costs predicted to fall in subsequent years.
Government Support and Price Cap Changes
The Department for Energy Security and Net Zero emphasised that the government is offering support to mitigate costs. Chancellor Rachel Reeves announced in last week’s Budget that £150 will be cut from power bills next April by scrapping the Energy Company Obligation scheme.
Separately, Ofgem has announced a slight increase to the energy price cap for the first quarter of 2026. From January 1 to March 31, 2026, the cap will rise by 0.2% across England, Scotland, and Wales. This translates to an increase of just 28 pence for a typical household paying by direct debit.
The regulator also reviewed plans from energy network companies, reducing proposed spending by more than £4.5 billion. The approved investment will fund around 80 new power projects, including new power lines and substations, to boost grid capacity and handle electricity from new renewable sources.
