Spend £25 billion to save £20 a year. That sounds like a bargain!!
The energy watchdog has announced new plans to transform the UK’s gas power network, upgrading it to be more “green” and potentially saving Brits an average of £20 a year on their energy bills.
Ofgem, the energy regulator, on Thursday published plans to invest £25bn ($32bn) over five years to develop more “clean” gas energy network the UK. The investment will go into the infrastructure that transports energy around the UK.
The plan would be paid for by energy companies themselves. The regulator has proposed doubling a cap on how much money energy firms can return to their investors and reducing firm’s spending plans to ensure costs do not rise for consumers.
Ofgem estimates the average gas bill would in fact fall by £20 per year at the start of its transformation plan.
“Ofgem is working to deliver a greener, fairer energy system for consumers,” chief executive Jonathan Brearley said in a statement.
“This is why we are striking a fair deal for consumers, cutting returns to the network companies to an unprecedented low level while making room for around £25bn of investment needed to drive a clean, green and resilient recovery.
“Now more than ever, we need to make sure that every pound on consumers’ bills goes further. Less of your money will go towards company shareholders, and more into improving the network to power the economy and to fight climate change.” https://uk.finance.yahoo.com/news/ofgem-green-energy-plan-25bn-bills-national-grid-sse-gas-082131746.html
If you read the small print however, the £20 a year saving only applies at the start of its transformation plan.
By the time the plan is completed, households will have paid out about £1000 each to fight climate change. As the plan covers five years, that works out at £200 a year.
We are not told exactly what this will cover, but we know it only covers power transmission and gas distribution. Plans for electricity distribution will be announced later, and will doubtless cost billions more.