Recommendation 16

While government has estimated that £280 to £400 billion of public and private investment in new generating capacity will be needed by 2037, it has not yet assessed when there may be periods of higher spending and how this will be paid for, particularly if consumer bills remain high due to wholesale prices.51 Since privatisation in the 1980s and 1990s, the power sector has largely relied on private investment for building and renewing infrastructure.52 The cost of building, maintaining and renewing the system therefore tends to fall to consumer energy bills rather than taxation.53 The Climate Change Committee has estimated that future capital expenditure costs will increase to £18 billion a year running up to 2035, and then decrease along with operating costs. It has also estimated that from 2044 onwards, the annual operational cost savings are projected to more than offset the annual additional capital investment required for electricity generation.54