The Workers Rights 
National Grid used to be one of Britain’s most reliable utilities. Today it is heading for a very different reputation. National Grid’s latest accounts showed net borrowing of £48bn at the end of September, and its finance chief expects National Grid debt to rise to between £60bn and £70bn by 2031. Households are asking a simple question as the UK energy debt crisis deepens: who pays for UK energy debt?
Quick Facts
- Current net debt: £48bn, expected to be £4bn higher in six months.
- 2031 outlook: £60bn-£70bn, could make it Britain’s most indebted non-financial company.
- Planned asset value: circa £115bn when investments are made
- Network costs: about £250 of the average annual electricity bill of £883
- Dual-fuel bill: £1,723 average, with EDF and Aeon expecting figures close to £2,400 around April
- Transmission charges: projected to increase from £4.2bn in 2024/25 to £13.6bn by 2030/31
- Return allowed: about 9.8 per cent a year on investment in the network
Why Is National Grid Borrowing So Much?
Much of the spending is tied to government decarbonization goals and a big leap in UK electricity network investment. The company believes that debt is the cheapest way to pay for this expansion, since raising equity would cost more, and that extra cost would be passed on to customers anyway. It also says its loans are secured by its own assets.
How the RAB Model Passes Costs to Customers
The Regulated Asset Base (RAB) model allows a regulator to put a value on the capital a company has invested, then allow it to charge enough to earn a set return and gradually recover the principal. In practice, the cost of the borrowing is borne by customers, subject to Ofgem approval.
What It Means for Household Bills
Rising energy bills in the UK are already taking account of grid upgrades. Forecasts from the National Energy System Operator indicate transmission charges will more than triple in the next six years,
This is on top of the cost of living crisis, with unpaid bills piling up. Ofgem’s director general recently warned that household energy debt has leapt from £1.1bn to at least £5bn and could double in the next decade. Already some three million households are in trouble, and more defaults could destabilise the wider power system.
Critics Challenge the Model
The company’s case is not accepted by everyone. Cambridge energy policy expert Prof David Newbery says the structure rewards over-spending and says cheaper onshore upgrades should be preferred to subsea links. The allowed return is too high, says Ecotricity founder Dale Vince, who claims the Conservatives and Reform are using network charges as a political attack line.
There are also comparisons with Railtrack and Thames Water, which have debts of £18bn. National Grid maintains its business is resilient and its share price is up 11% this year.
A Pattern Built Over Decades
National Grid’s borrowing has risen sharply over the years. Debt was £1.5bn in 1998, had risen to £8bn by 2002 and was £23bn in 2009, much of it due to US acquisitions. Then it rose from £28.5bn in 2021 to £43bn in 2022 following the takeover of Western Power Distribution. Critics say guaranteed customer income has helped finance this expansion.
What Happens Now?
The National Grid’s financial outlook depends on whether Ofgem tightens its control over returns and spending. If borrowing continues to rise as planned, ministers will find it harder to turn a blind eye to the issue of energy affordability in the UK.
Global Worker Rights Issues You Should Know
Who Pays Rising H-1B Extension Costs?
Check out what workers can do if employers refuse payment.
How Do Malaysian Workers Navigate Singapore?
Find the key housing, economic and retirement challenges.
Could UK Bosses Really Face Jail?
Uncover what the illegal hiring crackdown means for workers.
Why Are Ceuta Migrants Returning?
Browse the food, safety and migration pressures driving returns.
Can Europe Solve Its Labour Shortage?
See why migration controls clash with growing worker demand.
