UK consumers face higher energy bills after regulator approves $37 billion grid upgrade

British energy regulator has approved a 28 billion pound ($37.33 billion) investment over the next five years to ensure a safe and reliable energy system in the future, part of an upgrade plan that will add 108 pounds to consumer bills by 2031.

The investment is higher than a provisional assessment by regulator Ofgem in July of 24 billion pounds and comes despite the British government's pledge to reduce energy prices.

"The investment will support the transition to new forms of energy and support new industrial customers to help drive economic growth and insulate us from volatile gas prices," Ofgem CEO Jonathan Brearley said on Thursday.

Under Britain's regulatory framework, gas and electricity network companies must submit project plans and expected costs of investment, which are assessed by Ofgem.

Consumers pay for the investment through network charges, which currently make up almost a quarter of an average household energy bill.

The Department for Energy Security and Net Zero on Thursday said the investments were essential to keeping the lights on and to ensure energy security.

SSE (SSE.L), which owns Scottish and Southern Electricity Networks Transmission, said it welcomed the improvements to Ofgem's initial proposals and will review and assess the price control package in the coming weeks.

National Grid (NG.L) also welcomed the decision, which it said recognised the need for significant investment to ensure reliable operations with the expected amount of power transport set to double.

Campaigners from the End Fuel Poverty Coalition said they, too, recognised the need to ensure a reliable energy supply and help homes benefit from more renewable energy generation.

"But that shouldn't mean signing a blank cheque for network and transmission companies," they said.

($1 = 0.7500 pounds)