Ofgem has given the green light to an initial £24 billion investment to operate and maintain Britain’s gas networks and upgrade the country’s high-voltage electricity supergrid - a major step in preparing the UK’s energy infrastructure for a low-carbon future.

But what does this mean for your business energy costs?

What’s in the plan?

• Around £15 billion will go towards maintaining and operating the gas transmission and distribution networks.
• A further £8.9 billion will fund upgrades to Britain’s electricity transmission grid, with an additional £1.3 billion available for future expansion.
• This forms part of a much larger £80 billion programme aimed at connecting up to 126 GW of clean energy by 2030.
• Ofgem has already trimmed over £8 billion from network operators’ proposals to ensure value for consumers.

Why it matters for businesses

This announcement comes at a time when energy costs are still a major concern for UK businesses. While the investment aims to modernise and stabilise the energy system, it also has implications for energy prices in the short and medium term.

• Network costs will rise modestly - Ofgem estimates that the average bill impact will be around £104 by 2031, with roughly £74 for electricity and £30 for gas network charges. For business users, who consume significantly more energy than households, that could translate to a noticeable, but not dramatic, uplift in distribution and transmission charges.
• Potential long-term savings - Over time, improved grid efficiency and reduced constraint costs could help offset those increases. Ofgem projects that once benefits flow through, the net cost could fall to around £24 per year on the typical consumer bill, suggesting a stabilising effect on wholesale and network costs.
• More secure and flexible supply - The upgraded supergrid should reduce bottlenecks, cut curtailment of renewable power, and enhance energy resilience. For businesses, that means fewer risks of volatility linked to network congestion or supply constraints.
• A greener energy landscape - By expanding capacity for renewables, the plan supports the UK’s net-zero transition. Businesses investing in on-site renewables or green procurement may see more opportunities for flexible connections and cleaner electricity.

In summary

While the £24 billion investment represents an upfront cost, it’s ultimately designed to deliver a more stable, efficient, and sustainable energy system. Businesses should expect gradual changes to network-related charges over the next few years - but with potential benefits in reliability and access to low-carbon energy in return.

In short: this is infrastructure spending now to save on energy volatility later. Companies that factor this into their procurement and sustainability planning will be better positioned to manage costs and meet future carbon targets.

You can read Ofgem's full release on the Ofgem website.

At Honest Utility Group our team will look help you secure the best available rates and terms on your energy contracts ahead of any potential rises.

You can reach our team by phone on 0191 7208 238 or by email at info@honestltd.co.uk