UK's national grid to be updated in £24bn overhaul

After decades of calm, Britain's septuagenarian power grid is about to be transformed from a short, ageing, fossil fuel-hungry caveman to a tall, young sylph on a low-carbon diet.

Ofgem yesterday approved £24.2bn of investment in the national grid of gas and electricity pipes and wires, some of which date back to before the Second World War, with the bulk laid in the 1950s and 1960s.

The investment, to be made between 2013 and 2021 and funded by the consumer, will be used to prepare Britain's power grid for a surge in electricity generated from solar, wind, nuclear, biomass and other non-fossil fuel sources, in the biggest overhaul since it was created through a series of regional network mergers in 1938.

"Ofgem's investment decision is the culmination of a number of years of investigations and consultations. It sets the scene for a sea-change in the way the energy grid is connected up as we move to low-carbon electricity," said Angelos Anastasiou, an analyst at Seymour Pierce.

The investment will see the grid adapted to accommodate low-carbon sources of energy, which will be individually plugged into the system to replace the coal-fired stations due to close down because of old age and the need to satisfy European emissions targets. It will include an upgrade of the pipes and wires as well as an expansion of the grid to accommodate an expected surge in energy use and to cater for a rapidly changing power-generation map.

Traditionally, the coal-fired power stations that have dominated Britain's energy generation have been based in the North of England, while most of the consumption has been in the South. However, the growth of alternative sources of energy, such as wind power, will see far-flung parts of Scotland and Wales increasingly put on the map, while many of the northern coal plants close down.

Investment in the grid could require about £13bn of investment by 2050, but could potentially need as much as £61bn, according to ENA.