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Electricity bills could rise by £13 a year to fund infrastructure expansion
Power transmission companies want to be able to charge households an extra £13 per year on their energy bills by 2021 to cover the cost of connecting wind farms and other new generation to the national grid.
Scottish Power, Scottish & Southern and National Grid collectively want to spend £21bn over the next eight years on improving their systems, mostly to prepare for new wind farms coming on to the grid.
Transmission currently accounts for about £17 of the average £424 per year electricity bill.
National Grid estimates that its £14bn of major projects will be cost consumers another £10 each by 2021, increasing by about £1 every year.
Scottish and Southern Energy said £4bn of investment will add £2.37 by that time. But Scottish Power believes its £3bn investment ought only to cost the average household an extra £1 per year by 2021, increasing by just 13p per year.
Costs are rising because the companies are having to build more electricity substations and overhead power lines, especially in Scotland, to accommodate wind farms.
With this massive construction programme will come thousands of jobs. Scottish Power estimates that it will take on 1,500 new staff as a result of the upgrades needed to the transmission system.
However, Ofgem will need to approve the plans and test whether they offer value for money for consumers, with preliminary comments published in October.
The extra cost comes on top of series of green taxes on energy bills that will help fund companies spending £200bn on making Britain's energy network less dependent on fossil fuels.
Separately, Vestas, the wind turbine giant, said the market had begun to recover after a difficult period.
Ditlev Engel, the chief executive, said the company was in talks with customers about orders for a possible new factory in Sheerness, Kent. Its net profits in the second quarter were €55m (£48m), compared with a €143m loss last year.