Ofgem will this week set out a five-year multibillion-pound investment programme to build a greener, fairer energy system.
CEO Jonathan Brearley said the consumer-funded programme was an opportunity for the energy industry to play a key role in Britain’s recovery following Covid-19.
Huge investment is needed in the grid to charge millions more electric vehicles and connect more renewables to hit the 2050 net-zero emissions target set by the government, he said.
Brearley said: “We recognise that building a flexible, digitally connected, low-carbon energy system is a significant challenge that requires the industry – and the regulator – to take risks and innovate.
“The proposed settlement we will set out this week will open up the energy system to global investment so it can deliver a low-carbon future for the country.
“If companies embrace this opportunity, provide value for money to consumers and treat them well, they can play a central role in the recovery – creating jobs, economic growth and new industries.
“Energy companies will be invited to bid for additional funding as new technologies emerge so that we can get to net zero in the most efficient, smartest way. In return, they will have to reduce their ongoing costs significantly and accept much lower returns.”