{"id":808552,"date":"2026-07-18T16:45:11","date_gmt":"2026-07-18T16:45:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/808552\/"},"modified":"2026-07-18T16:45:11","modified_gmt":"2026-07-18T16:45:11","slug":"households-face-higher-bills-as-grid-project-costs-soar-500pc","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/808552\/","title":{"rendered":"Households face higher bills as grid project costs soar 500pc"},"content":{"rendered":"

A net-zero overhaul of Britain\u2019s electricity grid is at risk of becoming \u201cthe next HS2\u201d<\/a> as projects blow their budgets by almost 500pc, leading to higher energy bills for households.<\/p>\n

Ofgem, the industry watchdog, is facing requests for substantial spending increases to build new power lines after a global equipment shortage triggered delays and higher costs.<\/p>\n

The extra spending, if approved, will ultimately be footed by households and businesses through their bills and will amount to billions, if not tens of billions, of pounds.<\/p>\n

Some developers say their total costs are now expected to be as much as 467pc above the original estimates.<\/p>\n

The extraordinary figures have emerged from a report published by Ofgem that looked at eight projects being built in Scotland by SSE. The average implied cost increase was 283.5pc.<\/p>\n

Ofgem has agreed to allow SSE to spend more on early construction costs, but said it was yet to decide whether any further increases were reasonable.<\/p>\n

A senior energy industry source warned that the problem of overspending on grid projects was becoming \u201cendemic\u201d and compared the situation to the disastrous HS2 (High Speed 2) rail scheme, which busted its original budget by more than 200pc.<\/p>\n

\u201cThere\u2019s a very high risk here, frankly, that grid projects are set to become the next HS2,\u201d they said.<\/p>\n

\u2018Deeply concerning\u2019<\/p>\n

Ofgem has insisted it will \u201crigorously challenge\u201d all cost rises.<\/p>\n

But Ed Hezlet, an energy expert at the Onward think tank, said the \u201cdeeply concerning\u201d forecasts raised difficult questions about the substantial pipeline of upgrades that were in train across the country.<\/p>\n

He said: \u201cSupply chains are difficult right now, but cost increases of this magnitude deserve much more attention from the regulator and the Government.<\/p>\n

\u201cIf this inflation spreads into other planned transmission projects, consumers will be paying higher electricity bills for decades.\u201d<\/p>\n

The projects that reported cost increases to Ofgem were just a small fraction of the total national pipeline.<\/p>\n

Overall, the Government has said some \u00a380bn-worth of upgrades will be needed to realise Labour\u2019s clean power plans for 2030<\/a>.<\/p>\n

But officials have admitted that total spending through to 2050 could reach as much as \u00a3240bn as the system is overhauled for net zero.<\/p>\n

If that figure were increased by the average amount at which SSE\u2019s project costs are rising, it would hit an eye-watering \u00a3920bn.<\/p>\n

Network costs are already set to be the biggest driver of household bill increases between now and 2030.<\/p>\n

They are set to rise from \u00a3207 to \u00a3342 per year by the end of this decade, out of a total estimated bill of \u00a31,045 a year, according to the Electricitybills.uk tracker website.<\/p>\n

An Ofgem spokesman said: \u201cOfgem has tough price controls to limit the level of capital spend passed on to consumers.<\/p>\n

\u201cThese figures have not yet been through the final efficiency assessment. Every penny will be rigorously challenged by Ofgem.<\/p>\n

\u201cNothing is judged efficient just because a network company forecasts it.\u201d<\/p>\n

A Government spokesman said: \u201cA decade of historic underinvestment means our outdated electricity infrastructure is in need of upgrading, which is the only way we can build an energy system that can bring down bills for good.<\/p>\n

\u201cOfgem\u2019s price controls prioritise value for money for consumers while enabling this essential investment.\u201d<\/p>\n

A spokesman for SSE said:\u00a0\u201cThese comparisons aren\u2019t like-for-like. Early estimates were set years ago at the initial stage, while today\u2019s figures reflect real construction costs in a rising and volatile global market where competition for grid equipment is fierce.<\/p>\n

\u201cOfgem\u2019s approach to this funding ensures costs are locked down as far as possible, while enabling vital investment that will help cut energy bills by enabling consumers to use more UK-generated electricity.\u00a0<\/p>\n

\u201cOfgem will only allow costs to be recovered where there\u2019s a clear benefit for billpayers and anything later deemed excessive won\u2019t be allowed.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"A net-zero overhaul of Britain\u2019s electricity grid is at risk of becoming \u201cthe next HS2\u201d as projects blow…\n","protected":false},"author":2,"featured_media":808553,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[64,63,99,10830,164,90673,32512,92480,19182,382926,156],"class_list":["post-808552","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-au","tag-australia","tag-business","tag-companies","tag-economy","tag-electricity-bills","tag-energy-industry","tag-hs2","tag-net-zero","tag-ofgem","tag-standard"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/808552","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=808552"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/808552\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/808553"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=808552"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=808552"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=808552"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}