Ofgem Approves Draft Plan to Invest £8.9bn in Supergrid for 126GW of Green Energy

Ofgem has greenlit a £24 billion five-year funding package to ensure the UK’s gas infrastructure remains safe and reliable, while also laying the groundwork for a massive upgrade to the country’s electricity supergrid.

This announcement marks the start of the RIIO-3 price control period, set to run from 2026 through 2031. As part of the plan, funding will be allocated to 80 electricity transmission projects to connect up to 126 gigawatts of clean energy capacity by the end of the decade.

More than £15 billion will be invested in maintaining and operating the national gas grid as well as four regional gas distribution networks. Meanwhile, £8.9 billion is being committed upfront to strengthen the high-voltage electricity transmission system. Another £1.3 billion is being held in reserve for projects that are shovel-ready and just waiting for the green light.

Altogether, the full grid investment programme is expected to exceed £80 billion by 2031. That would make it the biggest expansion of the UK’s power network since the 1960s. Planned upgrades include work on 4,400 kilometres of existing overhead lines, alongside the construction of 3,500 kilometres of new transmission circuits, including several offshore connections.

The aim is not just to modernise the system, but also to protect UK households from future energy bill shocks driven by global gas market volatility. By easing pressure on the grid and reducing so-called wind farm constraint payments, the programme also hopes to trim long-term costs and improve resilience.

Ofgem’s decision follows months of rigorous cost reviews. The regulator has already cut more than £8 billion from the original proposals submitted by network companies, about 26 per cent, helping to keep the plan affordable for both government and consumers. A 6 per cent cap has also been set on the returns investors can earn from equity, further tightening cost controls.

Consumers can expect to see a rise of around £104 in their energy bills by 2031 due to increased network spending. However, improved grid efficiency should help offset that, with final bills forecasted to be £30 lower than they would have been without these investments.

Ofgem boss Jonathan Brearley said: “This record investment will deliver a homegrown energy system that is better for Britain and better for customers. Doing nothing is not an option and will cost consumers more.”

Public consultation on the draft plan is now open and will continue through the end of this year. Ofgem is expected to deliver its final verdict by late 2025.