Ofgem unlocks £28 billion investment to maintain a safe, secure and resilient energy grid

4th December 2025

Ofgem unlocks £28 billion investment to maintain a safe, secure and resilient energy grid and to upgrade and expand capacity to meet growing demands.

Energy network companies have been given the green light for multi-billion-pound funding to strengthen the stability, security and resilience of our energy networks. This investment will upgrade power and gas grids, creating a future-ready system that better shields customers from volatile energy bills.

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

This essential investment ensures a safe and reliable energy system for years to come.

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

Together this £28 billion commitment will rise to an estimated £90 billion by 2031 across both gas and electricity networks.

Investing now to maintain world class resilience and expand grid capacity is the most cost-effective way to harness clean power, support economic growth and protect the country from gas price shocks like the one seen in 2022.

As investment for ongoing operations, asset replacement and maintenance filters through to bills more quickly than investment in network expansion, these costs will add more to bills despite representing a smaller share of the overall £90 billion investment programme.

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."

Through 2025, the energy regulator has rigorously reviewed spending proposals from electricity transmission owners, National Gas, and the gas distribution companies, to ensure the best value for billpayers. We’ve set strict delivery targets, pushed companies to maximise efficiency, and rejected bids that do not serve consumers’ interests.

This scrutiny has delivered potential savings of over £4.5 billion (15%) against the initial £33 billion proposals.

The approved investment will fund 80 transmission projects and associated works nationwide over the next five years. This will significantly increase grid capacity through new power lines, substations and other technologies, to power millions of households with clean, secure, domestic energy and meet growing demand economic growth.

For businesses, the RIIO-3 investments will also help strengthen productivity and resilience across the economy, helping energy-intensive industries, such as steelworks, cut their bills, potentially by 10 to 15%. Energy intensive industries (like steel works) could see bills around 10 to 15% lower than they would have been without RIIO-3 action, thanks to offsetting cost reductions from wholesale prices and government’s supercharger mechanism.

Smaller business will see an increase in network charges. For example, by 2031, indicative network charge increases range from around £60 a year for a small holiday let or retail kiosk to £1,700 for small offices or hotels and £9,760 for a medium factory, reflecting differences in size and energy use. This is between 5% and 10% on electricity bills for a typical business before savings are taken into account. Crucially, as with households, the RIIO grid investments should deliver net benefits - through avoided constraint costs and lower wholesale prices.

Additionally, improved network capacity will enable faster connections for new industrial projects, supporting the need for electrification to meet government targets and supporting regional economic development.