Post - Blog
How opening the grid to competition could cut bills and boost growth
- 2 days ago (2026-06-22)
- Junior Isles
By Emma Ford , CEO of Eclipse Power
Net Zero Taiwan and Energy Taiwan 2026
Nobody thinks about the infrastructure behind Britain’s power network day to day: you flick a switch, the light comes on, you pay the bill. But the size of those bills is going up precisely because of increasing demands on the infrastructure that makes power possible, and the rising cost of upgrading the grid.
Roughly a third of the typical electricity bill goes on the cost of the physical infrastructure that moves electrons around the country. The high-voltage transmission network is the most expensive part of that chain, and the Transmission Network Use of System (TNUoS) charges that fund it rose 64% this April – adding thousands of pounds a year to the standing charges of a typical business customer.
The grid needs rebuilding to accommodate more renewables, more electrification, and surging demand from data centres. Transmission owners have submitted plans calling for around £80 billion of investment over the next five years. That investment will be recovered through consumer bills – the only question is whether we’ll pay more than we need to.
But not every megawatt of new demand or generation requires an equivalent megawatt of transmission capacity. Arrangements such as private networks can effectively pair up generation and demand customers – for example a data centre and a solar farm – keeping most of the electrons local, and reducing the requirements from the grid.
Co-location solutions such as private networks and microgrids are under increasing demand as an effective way to reduce grid requirements, meaning a cheaper and quicker connection can be secured. But these solutions can only go so far when the existing regulatory framework prohibits greater competition, and when the transmission network operators are struggling to deliver the grid access points necessary for major projects like wind farms or hyperscale data centres.
Enter the competition
Three companies operate Britain’s transmission network. No independent organisation has yet been allowed to build, own or operate assets alongside them. Yet transmission operators face genuine challenges in scaling skills and supply chains at the pace the economy demands, with the effect that major housing and infrastructure projects are stalled, imperilling jobs and investment and putting a dampener on growth. In turn, these constraints make it harder for the UK to deliver policy goals such as Clean Power 2030, and beyond that, Net Zero.
None of this is inevitable. Britain already has a functioning model for competitive power network delivery. Independent distribution network operators (IDNOs) now handle around 80% of new home electricity connections in England, delivering faster timelines and lower costs than the incumbent distribution network operators (DNOs). While still fully regulated to ensure the safe and reliable operation of distribution networks, IDNOs have the technical freedom to innovate. They also operate in a competitive market, with a commercial imperative to offer value and deliver customer service.
Eclipse has a long-held ambition to become the first independent transmission operator (ITO). We applied to Ofgem for a transmission licence in 2022: the regulator declined not because we lacked the capability, but because the framework wasn’t ready.
Now, the regulatory environment is catching up. In March, NESO launched its first market sounding for Competitively Appointed Transmission Owner – the first step towards allowing new entrants to bid for transmission projects. Separately, Ofgem’s demand connections reform proposes an independent transmission operator (ITO) licence, allowing qualified companies to build and operate high-voltage connection assets.
Back to the bill
Bringing independent operators into the transmission market will have a similar effect to what happened with the introduction of IDNOs in the distribution sector. New ITOs will bring desperately needed investment, skills and resources to transmission. Competition between operators will accelerate delivery, and help unblock the logjam that threatens the UK’s ambitions.
To bring it back to where I started, competition will also have a direct impact on the cost of updating Britain’s transmission network, and on the electricity bills that so many individuals and businesses are struggling with. Rebuilding the grid will cost money, and some of that cost will reach consumer bills regardless. But competitive delivery within the distribution sector has already brought down costs and connection times: applying competitive pressure to transmission investment would produce similar savings, at a scale that could take meaningful cost off consumer bills.
There are indirect benefits, too. The first comes from the ability of independents to provide faster connections, allowing projects to go ahead and create jobs and growth. Beyond that, accelerating the rate at which the grid can accommodate renewable generation means the UK can continue to reduce its exposure to the price instability of imported fossil fuels.
The final point is that a competitive market will allow the innovation necessary to use grid resources efficiently. Private networks and microgrids – along with other innovations such as phased connections and link optimisation – allow existing grid capacity to serve more demand. Every electron delivered through smarter use of existing infrastructure reflects increased capacity, without an associated cost landing on customer bills.
The evidence from distribution proves that competition works. It’s time to apply the same principle to the part of the network that desperately needs modernisation and development. Independent operators are ready and waiting – bringing them into the transmission network is an economic necessity.