Around £32bn must be spent on “rewiring” Britain’s gas and electricity network in the next 10 years, the energy watchdog Ofgem said this week.
Ofgem said investment in pipes and cables would double the figure spent in the last 20 years and was necessary to secure supplies to households while enabling the move to a low carbon economy.
The regulator said Britain’s “ageing networks”, mostly built in the 1950s and 1960s, needed replacing to match increasing demand and a change in how consumers will use energy. It is anticipated that more people will charge electric car batteries overnight, for example.
New sources of generation – including large-scale wind, gas or nuclear plants or small-scale renewables and home-based microgeneration – also require smarter networks, it said.
Ofgem’s call for a step change in investment came as it revealed a new pricing model, dubbed RIIO. The new model will set pricing controls every eight years, rather than the current five-year period. It will offer incentives to efficient companies and clamp down on poor performers.