Energy infrastructure investment ‘to hit consumers’

Electricity regulator Ofgem has pledged £22 million on upgrading Britain's gas and high-voltage electricity infrastructure – but this has le…

Electricity regulator Ofgem has pledged £22 million on upgrading Britain's gas and high-voltage electricity infrastructure – but this has led to warnings that some consumers could struggle to pay for it through yet higher charges.

Ofgem has launched a public consultation on the plans, but states such an upgrade is "vital", which may suggest any public views that carry weight will only have a minor impact on how the work is carried out, not whether it happens.

Chairman of the body Lord Mogg said: "As Ofgem's Project Discovery set out, Britain faces an unprecedented need to invest to replace ageing infrastructure, meet environmental targets and deliver secure supplies. This needs to be carried out at a time of global financial uncertainty, which makes attracting investment difficult but possible."

The one caveat to this investment and its cost is that £5 billion of the funding will be held in reserve unless a "demonstrable need for infrastructure" can be approved.

However, it states the reason for this is to "further safeguard consumers", a statement that would make sense in the light of a situation in which the public using the services are those ultimately footing the bill through their bills.

According to Ofgem, this will only add an extra £7 to annual bills in 2013 and £15 by 2021, with an £11 rise on average.

However, while agreeing that the work is indeed necessary and will lower running costs, uSwitch director of consumer policy Ann Robinson warned that even the extra £11 will "hurt consumers' pockets".

She pointed to research showing a third of consumers regard their energy as unaffordable and eight out of ten rationed their use last winter. 

This may suggest that with higher prices on the way, those in debt could benefit from useful help and advice on how to cope and lower their fuel bills.

Ms Robinson said that by finding out ways of reducing fuel usage efficiently, people can "keep a lid" on their energy bills.

By Joe White

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