Household energy bills will rise by £11 a year by the start of the next decade, an increase of more than 8% on current costs, under plans unveiled by the industry regulator for upgrading of gas and electricity networks.
Ofgem said the £22bn programme will see household bills rise by £7 next year, rising to £15 by 2021 – an average rise of £11 over the eight-year period. Distribution costs account for around 20% of a household gas bill, with any large-scale investment programme therefore having a material impact on household bills.
The change equates to an 8.4% increase on the average household dual fuel bill, which is £1,310 according to Ofgem. However, the proposals were slammed by Britain's dominant energy network business, National Grid. In a statement the company said its own plan "differs substantially" from Ofgem's, which argues that National Grid can deliver the improvements at a lower cost.