Safety warning over £22bn energy cap

The regulator has cut the total investment figure by nearly 25 per cent of that requested by energy companies over the next eight years.

It will still lead to a £7 rise in household bills in 2013 and £15 in 2021, it said.

Britain’s biggest energy distributor, which puts the cost of renewing and decarbonising the country’s ageing transmission networks over the next eight years at £31bn, said Ofgem’s plans did not adequately reflect the increased scale of investment associated with building an energy system for the future.

“We believe that these initial proposals will not appropriately incentivise the essential investments necessary to provide safe, reliable networks for the UK consumer and avoid delays to the achievement of the UK’s environmental targets,” National Grid said.

Ofgem’s proposal is part of plans to radically overhaul Britain’s ageing energy infrastructure by 2020 as set out in its energy-security review Project Discovery.

Ofgem said the proposed upgrades included in its £22bn plans would create around 7,000 jobs, mainly in construction, and connect 80,000 fuel poor households to gas distribution companies.

Ofgem expects to present full details of its proposals later in July.