Concerted action needed to avoid steep rise in constraint costs

Constraint costs could increase up to £7.8 billion by 2030 without concerted action on grid upgrades, the National Audit Office has warned.

In a report it said upgrades to the grid need to accelerate to avoid rising costs being passed on to consumers

Ofgem estimates that £70 billion of investment is required in the grid between 2025 and 2031 which is estimated to 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.

The NAO said 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.