Upgrades to the UK electricity grid are necessary for renewable energy generation but must accelerate to avoid rising bills for consumers, a report from the NAO has found.
The NAO’s latest report has said that constraint costs – which ultimately go on consumers’ bills – totalled £1.9 billion in 2025-26, and could increase up to £7.8 billion by 2030 without concerted action.
Ofgem estimates that £70 billion of investment is required in the grid between 2025 and 2031, increasing the cost to consumers by £60 by 2030, but saving £30 overall compared to the increased constraint costs if projects are not accelerated.
But the report finds the upgrade timetable “very challenging”, with the total 80 projects NESO identified as necessary in its 2024 Clean Power advice, 64 are ongoing.
Most are at an early stage of development and are not expected to be connected by the dates NESO originally said would be optimal for keeping costs down.
NESO identified three projects that needed to be accelerated to meet Clean Power 2030 and eight others where acceleration would also reduce constraint costs. There has not been a significant acceleration in any of these projects so far, it added.
In the absence of an integrated plan or whole-system appraisal, the report finds, the government has not demonstrated that these projects represent the best way of achieving its objectives.
The wider economy will also suffer if the grid capacity is insufficient to meet rapidly growing demand for new connections, it added.
The proportion of projects that received an offer of a connection at the time they wanted fell from around two-thirds (64%) in 2019-20, to around one-sixth (16%) in 2023-24.
The report notes that DESNZ, NESO and Ofgem have started to tackle blockages in the system such as planning, access, skills shortages and supply chains.
It recommends that these organisations strengthen their oversight of the upgrades, improve transparency over the cost and progress of each project, and review options for what to do with new generation projects that are due to connect to the grid before it is ready.
Gareth Davies, head of the NAO, said:
“While DESNZ, Ofgem and NESO have started to improve the way they work together, the planned upgrades of the electricity grid will test systems not designed for activity at this pace or scale.
“Value for money now depends on delivery. Failure to implement these necessary grid upgrades will hamper economic growth as well as increase consumer bills.”
Image from Shutterstock
