Consumers face £4.7bn bill for expansion of National Grid

Hard-pressed energy consumers face a "worryingly high" bill of £4.7bn to pay for the cost of hooking up wind farms and new nuclear power stations to the UK's electricity grid network over the next decade, it was made clear today.

A report from a joint government, industry and regulatory group said that 1,000 kilometres of new cables were needed in what would be the biggest expansion in the network for half a century.

The Electricity Networks Strategy Group (ENSG) said the shake-up would allow Britain to move towards a low-­carbon energy supply with the potential for 30% of electricity generated from renewables by 2020. It advises that work should start immediately on the project, which includes two high-voltage sub-sea links between Scotland and England.

Mike O'Brien, the energy and climate change minister, said it was vital to build a grid that was "fit for purpose" so that Britain could cut carbon emissions and make supply more secure. "This is a massive long-term investment opportunity and this upgrade work will help support jobs across the low-carbon economy," he added.

Department officials said that there was no intention at this point of the government picking up the tab, which would be an issue for the energy companies and their consumers. This suggests that higher bills are likely at a time when households have already been under pressure over ­rising energy bills, helped only recently by lower oil and gas prices.

The National Grid, which runs the transmission system in England and Wales and will pay for the bulk of the programme in the first instance, said it was government's role to provide the right framework of policies rather than pay directly for it. "We can recover the costs in the same way that we do all our other investments," said a Grid spokesman, who admitted it could need to spend as much as £9bn overall on changes to the network.

The Grid would bill utilities such as Centrica, EDF and E.ON, which generate the electricity and then supply it to customers using the Grid's network. These companies can be expected in turn to pass on the extra costs to the householder.

Chris Stubbs, director at environment consultancy WSP, said the £4.7bn bill highlighted the "worryingly high cost" of embracing new energy generation and that the consumer or taxpayer would end up paying.

"It is important to consider that offshore wind is particularly expensive when compared with onshore wind, as the laying of underwater cabling is costly, as is the building of the turbines," he added.

Friends of the Earth's executive director, Andy Atkins, welcomed the report as forward-looking. "Up to now the short-term attitude of the energy regulator Ofgem and lack of strategic ­thinking have stood in the way of the massive expansion of renewable energy needed to tackle climate change and bring hundreds of thousands of new jobs to this country," he said.

Source - The Guardian