Delays to electricity grid upgrades risk higher consumer bills

11 Sep 2026 12:07 PM

Upgrades to the nation’s electricity grid are necessary to accommodate increasing amounts of renewable energy generation but need to accelerate to avoid rising costs being passed on to consumers, a new report from the NAO finds. 

• The £70 billion upgrade to the electricity transmission grid is critical to avoid large rises in consumers’ bills as more of the country’s electricity is generated from clean sources
• But many grid upgrades are at risk of not being delivered when needed, which could increase short-term costs for consumers  
• Accelerating the necessary upgrades while ensuring they are delivered efficiently will test the way NESO, DESNZ and Ofgem work together to oversee and regulate the grid

When the grid cannot carry enough electricity from where it is produced to where it is needed, the National Energy System Operator (NESO) intervenes to keep supply and demand in balance. This has normally meant paying wind farms to turn off and gas plants to turn on.

The NAO’s latest report says that these payments, known as constraint costs¹ – 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. Ofgem estimated this will increase the network charges paid by consumers by £60 by 2030, but save them £30 overall compared to the increased constraint costs if projects are not accelerated.

But the report finds the upgrade timetable “very challenging”.

Of 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 constraint costs down between now and 2030. Many also face significant risks to the delivery of their current forecast delivery date. 

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.

Most of the grid upgrades NESO recommended were chosen because they were already in development. 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.

Three public bodies are responsible for the grid upgrades: DESNZ (Department for Energy Security & Net Zero) sets energy policy, NESO recommends the grid upgrades, while the regulator Ofgem has approved investment largely by focusing on reducing constraint costs. Three private companies, known as Transmission Owners², own and manage the grid and are responsible for delivering the upgrade projects.

The wider economy will also suffer if the grid capacity is insufficient to meet rapidly growing demand for new connections.

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.”

Read the full report

Upgrading the electricity transmission network

Notes for editors

1. Constraint costs occur when electricity generators are paid to turn up or down their electricity to prevent overloading transmission wires in some areas.
2. The grid in Great Britain is divided into three geographical areas, each owned and managed by a separate private company, known as a Transmission Owner:

• Scottish & Southern Electricity Networks Transmission (SSENT): northern Scotland.
• SP Energy Networks (SPEN): southern Scotland.
• National Grid Electricity Transmission (NGET): England and Wales.