Energy bills: Network charges to rise despite Ofgem price cap decrease

Network charges, which on average make up 22% of energy bills, are set to rise next April despite Ofgem easing the energy price cap. This is likely to raise overall bills unless wholesale energy prices fall drastically. Ofgem's draft determination on how much network providers can charge energy suppliers between April 2026 and March 31, 2031, will push up network costs by £24.

The findings will be subject to consultation before a final decision at the end of the year. They reflect demands on operators to ready power and gas networks for the expansion in nuclear and renewable energy to meet the country's net zero goals.

Ofgem has given provisional approval to plans for a £24 billion investment programme over the five-year term. According to Sky News, this represents a fourfold increase on current levels.

Projects include upgrades to more than 2,700 miles of overhead power lines.

If given a thumbs up as expected, the subsequent network cost increases threaten to pile more bill misery on households from April next year.

News of the network cost rise comes as 22 million UK households on the energy price cap are poised to benefit from the first decrease for a year.

The cap is reducing from an annual average of £1,849 between April and June to £1,720 from July to September, thanks to the easing of wholesale costs seen in the spring.

Households on the energy price cap were warned to read their meters by the end of June to fully benefit from lower energy prices starting today (July 1).

Failing to do so leaves the risk of paying the higher pre-July 1 rate for energy used in the form of estimated bills. Ofgem has also reminded households they do not have to pay the price cap, saying "there are better deals out there".