ENERGY watchdog Ofgem has approved billions of pounds of investment by energy companies to overhaul the UK’s gas and electricity grid, reducing initial overall spending plans by 16 per cent to 2021.
The proposals will nevertheless add £15.10 to the average yearly fuel bill by 2021, Ofgem said.
Energy companies initially proposed spending £45.4bn on upgrading and maintaining the country's energy networks until 2021, which would be clawed back through higher energy bills.
Ofgem’s latest proposal, which aims to curb energy spending plans in order to reduce the impact on utility bills, reduces that figure by 16 per cent to £38.2bn.
Within the £38.2bn, £24.4bn will go towards modernising the energy grid, up £2bn compared with initial proposals made in July following a row over the budget.
Initial proposals made by the regulator were slammed for being too low by the country's biggest energy distributor, National Grid, in July. The FTSE 100 company will respond to Ofgem’s latest proposals in March.
The spending plan comes as the government-sponsored Fuel Poverty Advisory Group warned that high utility bills will push 300,000 more homes into fuel poverty this year. The term fuel poverty means a household spends more than ten per cent of their income on heating.
City A.M. Reporter