Britain’s electricity grid is set for a major expansion after Ofgem approved £4 billion of accelerated investment to fast-track the delivery of high-voltage transmission projects.
The regulator’s new Advanced Procurement Mechanism (APM) will allow National Grid, SSE and ScottishPower to secure essential equipment, materials and services years in advance, helping them avoid costly supply chain delays and start projects as soon as planning approval is granted.
The UK’s transmission network is under pressure to keep pace with the drive for clean power by 2030.
The system needs 80 major transmission projects to be completed to meet this target, but supply chain bottlenecks and rising global demand for materials have threatened progress.
The APM will enable National Grid ET, SSEN Transmission and SP Energy Networks, which own and maintain Britain’s high-voltage grid, to buy materials upfront.
This will help control costs, attract international investment and ensure projects move faster, preventing grid expansion from becoming a barrier to net zero.
Ofgem has granted these ‘use it or lose it’ capital allowances ahead of the next price control period from 2026 to 2031. However, it has retained the power to reopen the settlement if market conditions change.
The new system has several benefits, including:
- Faster project delivery, helping the UK achieve clean power by 2030.
- Lower costs, as early procurement avoids price hikes driven by supply chain pressures.
- More investment in domestic manufacturing, supporting the government’s 2030 Action Plan.
- Less risk of delays, as vital components can be secured well in advance.
The move follows a National Energy System Operator (NESO) report last November, which called for urgent reforms to remove grid bottlenecks and keep Britain on track for its climate targets.
Building a modern, clean and secure energy system is the key to ending our reliance on international gas markets responsible for volatile prices, so we must do everything we can to clear the way for trailblazing projects to move forward.
“The Advanced Procurement Mechanism is an innovative model that could be extended in the future to develop other areas of the energy sector and possibly mirrored by other regulatory bodies supporting the delivery of national infrastructure.
“It’s a significant step on the accelerator as we drive towards net zero and we are committed to working with government, GB Energy and the National Wealth Fund to maximise the economic opportunities of infrastructure investment.”
Akshay Kaul, Ofgem Director-General
To protect consumers, Ofgem has set strict governance rules to ensure funding is only used for its intended purpose, with any unspent money returned to billpayers.
The regulator will also prevent waste by allowing pre-orders only for equipment that can be used across multiple projects.
With APM in place, Ofgem believes Britain’s grid upgrades should now move faster—helping unlock more clean energy, cut reliance on fossil fuels and drive down electricity costs.
