The UK must invest around £89 billion ($118 billion) through the 2030s to overhaul its power grid, which could face growing inefficiencies and higher costs for consumers without upgrades, the country’s grid operator said on Tuesday.
The latest National Energy System Operator estimate represents a rise of around 53% from a plan announced in 2024 and comes as the Labour government faces pressure from opposition parties over its clean power targets and as it seeks to lower energy costs to help with a cost of living squeeze.
Network fees currently make up around 25% of a typical domestic energy bill in the UK.
The rise is due to recommendations for new offshore connections, such as a £15 billion project to connect wind projects in the Celtic Sea to the power grid, and inflation, NESO’s Beyond 2030 report said.
Typically network upgrade costs are decided and approved by the energy regulator Ofgem and then added to electricity bills.
The power grid upgrades are needed to help meet demand which is expected to grow more than 30% by the mid-2030s, driven by electric vehicles, new housing, industry and AI-enabled data centres, NESO’s report said.