Ofgem has placed price controls on electricity distribution networks to ensure that money spent on renewable energy does not become a burden to the consumer.
All seven owners of the networks, which distribute electricity to homes and businesses on the national grid, have agreed to the price controls that will raise energy bills for UK households by an average of £4.30 year-on-year.
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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