Consumers collectively paid an extra £1.9 billion on energy bills for constraint costs between 2025 and 2026, a new report has found.
When the grid can’t carry enough electricity, The National Energy System Operator (NESO) intervenes to balance supply and demand but that means paying wind farms to turn off and gas plants to turn on.
A report by the National Audit Office (NAO) has found that these payments ultimately go on consumers’ bills and could increase to £7.8 billion by 2030 if prevention action isn’t taken.
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.”
Ofgem estimate that £70 billion of investment is required in the grid between 2025 and 2031, which is predicted to increase network charges paid by consumers by £60 by the end of the decade but save them £30 overall.
The report by NAO finds this upgrade timetable challenging as 80 projects have been deemed necessary by NESO in its 2024 Clean Power advice, of which 64 are ongoing and others are not expected to be connected by the original target dates.
The NAO warns the wider economy could suffer if the grid capacity is insufficient to meet growing demand for new connections.
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