Power Grid Profits Soar Amid Rising Bills and Growing Backlash in Britain

Recent financial reports reveal surging profitability for the three companies that operate Britain’s high voltage transmission networks, offering a stark contrast to the difficulties faced by other sectors under mounting energy costs. In the half year to September, National Grid recorded a 26 percent rise in statutory operating profits from its UK transmission business, growing from £642 million to £810 million. SSE increased its operating profits from £158 million to £292 million over the same period, while Scottish Power reported a 23 percent rise in pre-tax earnings to £1.2 billion.

While manufacturers and energy-intensive businesses such as ExxonMobil and Fired Earth face closures attributed to rising costs and climate levies, transmission businesses enjoy steady regulated returns. These monopolies are responsible for managing the infrastructure that carries electricity from power plants and wind farms to towns and cities. Their charges, visible on customer bills as standing charges, are tightly controlled in theory. Ofgem, the industry regulator, must approve investments and regulate profits, yet many argue this oversight has not effectively protected consumers as bills continue to climb.

The average household currently pays about £52 yearly to transmission companies, according to grid analysts, with charges projected to increase to £93 by next April and to exceed £120 by 2030. The primary reason for these rising costs lies in the UK’s ambitious programme to upgrade and expand its grid, particularly to connect new offshore wind developments. Decarbonisation strategies under the current Energy Secretary have rapidly advanced transmission companies’ investment plans, with government forecasts now suggesting these entities will add up to £12 billion to customers’ bills by 2031, a dramatic increase from previous years.

Each of Britain’s three transmission operators covers a distinct region: National Grid serves England and Wales; Scottish Power operates in southern Scotland; SSE manages northern Scotland. The networks interlink to transport significant volumes of renewable energy southwards. Since privatisation, their charges have historically formed only a small part of household bills, but a sharp rise in planned investment is changing this.

Under programme RIIO-T3, transmission companies are set to embark on a scale of infrastructure expansion unprecedented in British energy history. SSE plans to invest £32 billion over five years in northern Scotland, including controversial pylon developments and subsea cabling. Scottish Power seeks to spend over £11 billion on new substations and upgraded lines, while National Grid’s “Great Grid Upgrade” proposes a £35 billion spend, with community opposition mounting in affected regions. Ofgem’s approval of these plans appears almost certain, with its assessment highlighting the need to expand at speed to support clean, renewable energy and reduce future exposure to gas price shocks.

The transmission model incentivises investment because profits are tied directly to the value of capital assets. Rate-of-return allowances of up to 7 to 8 percent encourage operators to increase investment, and the sector’s asset base is forecast to rise from £31 billion to £87 billion by 2031. This could allow profits to triple, at a time when suppliers delivering power to end users are tightly constrained to 2 to 3 percent margins. Ofgem and the Department for Energy Security and Net Zero argue that these returns are necessary to keep vital infrastructure financially robust, with long-term savings expected by reducing future constraint payments and supporting greater energy independence.

While residential customers may eventually benefit from investment, analysts warn that medium and large businesses will see substantial increases to their costs, which could reach tens or even hundreds of thousands of pounds annually by 2030. With rising energy price caps factoring in the cost of government-backed projects such as new nuclear development, pressure is mounting on regulators and ministers to identify measures that offset spiralling bills for both consumers and industry.