Yahoo Finance £25bn green energy plan that could save Brits £20 a year on bills
The energy watchdog has announced new plans to transform the UK’s gas power network, upgrading it to be more “green” and potentially saving Brits an average of £20 a year on their energy bills.
Ofgem, the energy regulator, on Thursday published plans to invest £25bn ($32bn) over five years to develop more “clean” gas energy network the UK. The investment will go into the infrastructure that transports energy around the UK.
The plan would be paid for by energy companies themselves. The regulator has proposed doubling a cap on how much money energy firms can return to their investors and reducing firm’s spending plans to ensure costs do not rise for consumers.
Ofgem estimates the average gas bill would in fact fall by £20 per year at the start of its transformation plan.
“Ofgem is working to deliver a greener, fairer energy system for consumers,” chief executive Jonathan Brearley said in a statement.
“This is why we are striking a fair deal for consumers, cutting returns to the network companies to an unprecedented low level while making room for around £25bn of investment needed to drive a clean, green and resilient recovery.
“Now more than ever, we need to make sure that every pound on consumers' bills goes further. Less of your money will go towards company shareholders, and more into improving the network to power the economy and to fight climate change.”
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The plan was met with an immediate backlash from energy companies. Network operator National Grid (NG.L) said it was “disappointed” by the proposals which it said “leaves us concerned as to our ability to deliver resilient and reliable networks, and jeopardises the delivery of the energy transition and the green recovery.”
Rob McDonald, the managing director of transmission at SSE (SSE.L), said in a statement: “Ofgem’s first pass at a settlement resembles a worrying return to austerity. Ofgem’s draft determination is a barrier towards achieving net zero and damaging to the green economic recovery.”
Shares in both companies slumped. National Grid was one of the worst performers on the FTSE 100, down 3.2%, while SSE fell 1.3%.
Ofgem will consult with energy companies on the plan until September. A final decision on whether it will be implemented is expected by December.
