Electricity bills to go up, but National Grid says it is not enough

July 22, 2012 at 10:25 am

Ofgem has stated that it wants energy firms to invest £22 billion over the next eight years, to upgrade gas and electricity networks across the UK. The investment is going to be funded by increased energy bills, but National Grid has now said that the increases which have been proposed are not enough.

Hard-up energy customers will not like the sound of that, as some people are already struggling to pay their bills. But the improvements are essential and the only way to fund them is through increased bills.

At the moment, Ofgem has stated that bills will go up £7 in 2013 and £15 in 2021, but National Grid says this is 20% short of its estimates if the work on the networks is to be completed.

The essential investments are needed to improve the networks and to avoid failing to hit environmental targets. The chairman of Ofgem, Lord Mogg, said that “Britain faces an unprecedented need to invest to replace ageing infrastructure, meet environmental targets and deliver secure supplies.”

£15 billion of the £22 billion will go towards improving the electricity network in England and Wales and the gas network in the whole of the UK, and the remaining £7 billion will go towards the networks which transport gas to people’s homes.

However, energy companies wanted £21 billion for the electricity transmission system and £9 billion for the gas pipelines.

Ofgem says that the investment could lead to the creation of 7,000 new jobs, and it will also help to secure the energy supply of Britain.

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