Consumer group Which? said in December said that gas and electricity bills for households could increase by 35 per cent by the year 2020, due to factors including investment in renewables.
Investment in renewable energy technology and large scale trials of smart grids is expected to reach £7.2 billion in the next five years.
Steve Smith, from Ofgem, said: "We have set a tough but fair price control for the companies so they can invest to maintain high performance and adapt their networks to the low-carbon economy. The package will be delivered at a fair price to consumers who will benefit from improved service."
The price controls are part of a price control package which focuses on sustainable development of the energy sector.
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