The Energy Transition | Ofgem estimates £70bn needed by 2031 to upgrade GB grid, National Audit Office warns

This week's edition looks at the National Audit Office’s report on transmission network upgrades and a government call for evidence on how AI can support a cleaner, smarter energy system.

Ofgem estimates £70bn needed by 2031 to upgrade GB grid, National Audit Office warns

The National Audit Office (NAO) has published a report on the progress made by the Department for Energy Security & Net Zero (DESNZ), Ofgem and the National Energy System Operator (NESO) in upgrading GB's electricity transmission network and the future outlook for successful delivery. It found the upgrade timetable "very challenging". 

The report highlights that an acceleration of upgrades is essential to facilitate the large number of renewable generation projects waiting to connect to the grid and support the government's Clean Power 2030 (CP30) target. 

The NAO warns of an increase in both constraint and consumer costs if these are not carried out in a timely, predictable and cost-effective manner. Of the 80 projects initially classified by NESO as critical to achieve CP30, the NAO reports that 56 are still needed, with only five currently looking to be delivered on time and without delay. Many others are either in early development or face significant delays.

Investment challenge

Ofgem estimated £70 billion in investment would be required from the transmission owners between 2025 and 2031, which is four times current rates, and NESO has suggested £89 billion is required beyond 2030.

The NAO has reported that constraint costs totalled £1.9 billion in 2025-26 and could rise to £7.8 billion by 2030 in the absence of "concerted action". The report outlines that this directly impacts consumer bills and it notes that, while the £70 billion investment would increase network charges paid by consumers by £60 by 2030, this would overall save consumers £30 (as compared to a counterfactual where projects are not accelerated).

Planning urgency

The NAO acknowledges that DESNZ, Ofgem and NESO "have taken steps to accelerate approvals, enable earlier investment, and join up their oversight" and have plans in place to improve spatial planning and coordination of generation, grid capacity and demand. However, the report notes these plans will not have an impact until after 2030. 

It recommends the three bodies align on a consistent and coordinated approach and plan for delivery, strengthening their portfolio management of the grid upgrade programme. The NAO also calls on them to publish regular updates and to review the options for CP30 generation projects to connect before sufficient network capacity is available, and whether its standard for security and quality of supply strikes the right balance between system reliability and the speed of network upgrade delivery. 

Gareth Davies, head of the NAO, said: "Value for money now depends on delivery".

UK government calls for evidence on AI in the Clean Energy System

DESNZ has published a call for evidence setting out its "emerging thinking" on the ways in which artificial intelligence (AI) could transform the UK's energy system. The government in its 8 September announcement said it is seeking views on the opportunities, barriers and risks involved, with responses to inform decisions on where and how government should act to support AI adoption. The exercise is intended to culminate in the UK's first AI for Clean Energy Strategy. 

The call for evidence focuses on three areas. First, it concerns principles for AI deployment in the energy sector. The government proposes three overarching aims for AI use: reducing consumer bills, improving system efficiency and coordination to enable faster decarbonisation, and maintaining energy security.

The second focus is on barriers to near-term adoption, including data access, economic incentives, regulatory clarity, technical integration and skills and capability.

Third it looks at longer-term transformative change: the use of fully embedded and increasingly autonomous AI in a future energy system scenario and the implications for system planning, operability, risks and governance.

Responses are encouraged from energy sector stakeholders, including industry, regulators, innovators, researchers and consumer groups. Responses should be submitted to aiforenergy@energysecurity.gov.uk before 6 November 2026.

This article was written with the assistance of Maggie Hudson, Trainee Solicitor and Jackson Clay, Solicitor Apprentice.