The National Energy System Operator (NESO) has recently published the transitional Regional Energy System Plan (or ‘tRESP’)[1] – the first step in their journey towards full Regional Energy Systems Plans. The need for a transitional RESP is driven by giving electricity distribution networks guidance on what will be expected in their business plans for the next price control, ED3, which will run from 2028-2033, and for which the Distribution Network Operators (DNOs) will need to submit business plans to Ofgem at the end of this year.
As a public corporation bound by the UK’s legally binding targets under the 2008 Climate Change Act, NESO’s work in this area has been developed in this context. In line with the Climate Change Committee's (CCC’s) carbon budgets advice, NESO’s tRESP outlines a need for electricity distribution upgrades to serve 28 million electric vehicles, 8 million domestic heat pumps, and 1.7 million domestic customers with heat-pump-supplied heat networks, as well as 95GW of additional generation and storage – all by 2036.
This is an astounding degree of infrastructure upgrades in what is a relatively short period, all adding significantly to energy bills at a time where cost-of-living pressures are high on the agenda. In October 2025, the Big Six suppliers told the Energy Security and Net Zero Select Committee[2] that these sorts of system costs are why energy bills will continue to go up even as the wholesale price of electricity and gas fall.
As NESO and the Department for Energy Security and Net Zero (DESNZ) release their modelling, we can begin to see how big these costs will be. It is our collective duty to customers as a sector that this investment is fully justified.
The imperative to achieve the carbon budgets has never been greater, and NESO has fulfilled its role with the tRESP to show a technical (not necessarily a plausible) pathway to achieve those budgets. But the pace of rollout of these technologies or the underpinning policies that enable the budgets are not necessarily in place.
The CCC’s 7th Carbon Budget advice proposed 450,000 heat pump installs per year in 2030 and 1.5 million in 2035. This is miles from the current trajectory of heat pump deployment, which if it continues would achieve a total of around 2.5 million heat pumps in total by 2036. Government’s current target, stated in the recent Warm Homes Plan, of 450,000 heat pump installations per year by 2030 is a significant downwards revision from previous targets, yet still represents a huge ramp up from current rates. That exponential trajectory would need to continue into the 2030s to get anywhere near to the levels set out in the tRESP. History tells us that there is no reason we should expect this to happen – government policy on heat decarbonisation is marked with a ‘legacy of over-optimistic projections’, as some commentators have pointed out[3].
While the electric vehicle rollout has had greater success, a figure of 28 million would mean that nearly all passenger vehicles in ten years’ time would be electric (this includes all the vehicles which customers have only just bought and may well hope will last a good time longer than a decade).The figure of 95GW of additional electricity supply, with more battery systems and substations alongside, would represent a massive uplift on today’s capacity and would need to be delivered in the context of a connections backlog which currently stands at 738GW.
What this all means is that NESO is asking DNOs to plan to upgrade the electricity system to meet an electrification rate set out by the carbon budgets that neither today’s policy nor reality on the ground support. The risk here, and it is a significant one, is that consumers end up paying a lot more than they need to. But this is not just a risk to affordability. There is a feedback loop – if excessive infrastructure costs are loaded onto electricity bills in the near term then all that will do is disincentivise the electrification which the network upgrades are looking to facilitate.
A 2025 report by the National Infrastructure Commission[4] suggests that meeting distribution-level peak electricity demand growing from 44GW to 152GW by 2050 could cost £76bn - £0.7bn per GW – or over £3000 per home. Studies which include more of the electricity grid reach figures four times higher. NESO’s latest Holistic Transition figures expect £50bn of total capital (£1700 per home) to be spent on just the distribution-level electricity grid between 2028 and 2036, which includes activities to support heat pump and EV roll out – and is £10bn more than the Falling Behind scenario. These costs are material and hugely variable – which begs the question of whether we really know what all of this will cost?
For gas networks, the level of electrification assumed in the tRESP sends a powerful signal about the assumed trajectory of the gas network over that same period. While views vary massively on the role of the gas network in the energy transition, it is of paramount importance that the gas networks are able to attract investment to keep their infrastructure safe, reliable and affordable for whatever period they are needed for. The gas networks cannot base their planning on ambitions – it must be based on reality.
There are also ways in which we can use our gas network to advance decarbonisation while mitigating against the risk of over-delivery of electricity infrastructure. NESO’s view in their 2025 Future Energy Scenarios is that we will still need hundreds of terawatt-hours of gases in 2050, with co-existing networks for natural gas, biomethane, hydrogen and CO2. Supplementing electrification with a wider suite of technological solutions which can utilise our full range of existing energy infrastructure, such as hybrid heat pumps and biomethane, would enable a continued decarbonisation trajectory while allowing the DNOs to plan their investment for a more realistic electrification pathway.
This may well also prove to be the right thing for the consumer as well. Recent work with the Green Gas Taskforce[5], delivered by Baringa, has shown that integration of a significant amount of biomethane into a 2050 Net Zero energy system could lead to a cumulative saving of £174bn (Central Case) versus a high electrification counterfactual with low biomethane. A good proportion of this saving comes from deferral of unnecessary power sector investment.
The ED3 plans, if planning to the tRESP projections, may be the first time we see some of the real costs of electrification and the impact on consumer bills. The publication of the tRESP could well be an opportunity to stop and think, so that we make sure consumers do not pay for a larger network than they will need or use in the timeframe proposed. This is the opposite of the water sector which suffered from underinvestment. These plans are a green light for billions of pounds of investment, put onto bills immediately, for infrastructure which may well not be required for many years to come, or even at all.
A degree of electrification, probably a significant one, will almost certainly play out over the next few years and will be a central part of how we can get to a decarbonised energy system. But upgrades to the electricity system must be grounded in reality and justifiable to the public. Scenarios or pathways for planning must reflect delivery risk, rather than treating ambitions as certainties. The risk of getting this wrong is a failed energy transition which also fails customers.
[1] https://www.neso.energy/what-we-do/strategic-planning/regional-energy-strategic-planning-resp/transitional-regional-energy-strategic-plan-tresp-consultation
[2] https://committees.parliament.uk/event/25089/formal-meeting-oral-evidence-session/
[3] More information in Stonehaven's report ‘Powering Homes, Powering Growth: A practical path to heat decarbonisation’ https://www.stonehavenglobal.com/powering_homes_powering_growth_a_practical_path_to_heat_decarbonisation
[4]https://webarchive.nationalarchives.gov.uk/ukgwa/20250310143236mp_/https:/nic.org.uk/app/uploads/Electricity-Distribution-Networks-report-21-Feb-2025.pdf
[5] https://greengastaskforce.co.uk/wp-content/uploads/2025/10/Cadent-GGT_Biomethane_Study.pdf