New rules on how much energy companies can charge to recoup more than £30 billion worth of investment in the electricity network will see energy prices rise, according to the Energy Advice Line.
But Julian Morgan, managing director of the price comparison, switching and advice service for energy consumers, said the increases could have been a lot worse.
“More than £30 billion worth of new investment to upgrade energy infrastructure will be spent up to 2021. It’s a massive investment that’s urgently needed,” Mr Morgan said.
“Under their arrangements with energy regulator Ofgem, energy network companies can charge for their services to support this investment.
“This is likely to see household energy bills rise, but given the size of the investment, the increases could have been a lot worse.
“Household and business energy consumers are already struggling with spiraling energy prices, but unfortunately these relatively modest increases are necessary to make the UK’s energy infrastructure fit for purpose in the future.”
The rules governing how much energy network operators charge for their services come into effect this week.
According to Ofgem, the arrangements are designed to encourage operators to “deliver improvements in customer satisfaction, reliability, stakeholder engagement and sustainable services at value for money to consumers”.
Ofgem has said that the increased investment could increase household energy bills by an average £9.60 per year until 2021.
The projects slated for investment include:
• around £7 billion earmarked for Scotland’s high voltage electricity network, creating around 1,500 jobs
• a £15.5 billion upgrade for the high voltage electricity network in England and Wales and the high pressure gas networks across Britain, creating around 7,000 jobs, mainly in the construction supply chain
• around £8.7 billion to ensure that Britain’s low-pressure gas networks, which deliver gas to homes and businesses, remain safe and reliable.