Households near new and upgraded pylons to get £2,500 off electricity bills

Thousands of households living near new or upgraded electricity pylons are set to receive £2,500 off their energy bills under a new UK Government scheme.

Payments will begin next year, with the first 43 transmission projects expected to qualify for the Bill Discount Scheme, which is being unveiled on Wednesday.

Households living within 500 metres of eligible projects are expected to receive £2,500 over ten years, with discounts paid every six months.

The projects stretch from the Scottish Highlands to the south of England, with communities in more than 40 locations potentially benefiting from hosting new grid infrastructure.

About two-thirds of the projects unveiled on Wednesday are in Scotland.

Energy minister Michael Shanks said the payments were intended to ensure communities hosting the infrastructure directly benefited from the UK’s electricity grid upgrades.

“Upgrading Britain’s electricity grid is a vital part of how we deliver secure, homegrown energy and unlock economic growth across the country,” said Shanks.

“It is a moment of national renewal – upgrading what was built largely in the 1960s for the modern age to bring down electricity bills for households across the country.

“It’s vital we build again as a country and we are determined those communities which host pylons should benefit, which is why we’re bringing down the energy bills of those hosting this vital national infrastructure.”

The UK Government says the country’s electricity grid, much of which was built in the 1960s, needs upgrading to connect new sources of electricity generation, strengthen energy security and help create a more affordable energy system.

Who will qualify for the £2,500 discount?

Households will only become eligible once a project has secured all the necessary consents and its main construction works have started.

Projects where construction began on or after March 10, 2025 will be eligible.

For most households, the discount will be paid automatically through their electricity supplier every six months.

However, some households may need to apply, including those supplied via commercial meters.

Eligible households are expected to receive more information in the first half of next year, when they will be contacted directly by their energy supplier or Ofgem.

How will Scottish households benefit?

Scotland is expected to be a significant beneficiary of the scheme, with major grid upgrades planned as the UK seeks to connect more renewable electricity generation.

Scottish secretary Douglas Alexander said communities living alongside new pylons should see direct financial benefits from the infrastructure.

He said: “Scotland is playing a central role in the UK’s energy transition, and as we build the modern grid needed to harness that power, it is only right that local families living alongside new pylons see real, direct savings on their electricity bills.

“These projects are essential for energy security and lower bills, and the communities hosting key infrastructure for this long-awaited grid upgrade deserve cheaper energy in return.

“I encourage households across Scotland living near these new or upgraded sites to check if they qualify for a discount.”

The scheme is being introduced alongside wider community funding for areas hosting new electricity infrastructure.

Under separate Community Funds guidance, communities near National Grid’s Bramford to Twinstead reinforcement project in England are set to receive more than £4m for local projects.

In Scotland, communities near SP Energy Networks’ Chirmorie overhead line project could be eligible for around £2.4m in community benefit funding.

How will the payments work?

Ofgem will administer the Bill Discount Scheme and oversee the delivery of payments to eligible households.

Neil Lawrence, Ofgem’s executive director for delivery and schemes, explained: “Communities that host new electricity transmission infrastructure are playing a vital role in delivering the cleaner, more secure energy system Britain needs.

“The Bill Discount Scheme will help ensure eligible households living near these projects see a direct benefit through discounts on their energy bills. As the scheme administrator, Ofgem’s role is to make sure payments are delivered effectively, fairly and transparently to eligible customers.

“We look forward to working closely with government, electricity suppliers and transmission owners to ensure the scheme is ready to support households when payments begin.”

Where are the projects in Scotland?

SSEN Transmission

Banniskirk Hub 400kV substation and HVDC converter station – North Scotland
Cambushinnie 400kV substation – North, and central Scotland
Fort Augustus Substation 400kV Upgrade – North Scotland
Spittal – Loch Buidhe – Beauly 400kV overhead line – North and North West Scotland
Beauly – Peterhead 400kV overhead line – North, and North East Scotland
Carnaig 400kV substation – North Scotland
Hurlie 400kV Substation – North East Scotland
Kintore – Tealing 400kV overhead line – North East Scotland
New Fanellan 400kV substation and Converter Station – North Scotland
Creag Dhubh – Dalmally 275kV overhead line – West Scotland
Edinbane substation – West Scotland
Broadford substation – West Scotland
Skye 132Kv overhead line reinforcement – West Scotland
Netherton Hub – North East Scotland
Tealing – Westfield 400kV overhead line – Central, and East Scotland
Bingally 400kV Substation – North Scotland
Greens (New Deer 2) 400kV substation – North East Scotland
Lewis Hub – West Scotland
Emmock 400 kV Substation – North East Scotland
Crarae 275kV Substation – West Scotland

SP Energy Networks 

Coalburn Substation – Central Scotland
Mark Hill Substation– South West Scotland
Stranoch OHL and Substation – South West Scotland
Chirmorie – South West Scotland
Branxton Substation – South East Scotland
Sanquhar Substation- South Scotland
Denny to Wishaw 400kV Reinforcement (DWNO) – Central Scotland, and South Scotland
Eastern Subsea HVDC Link from Westfield to South Humber (TGDC) (EGL4) – East of Scotland
Kincardine North – Tealing 400kV Substation (TKUP) – East of Scotland
Kincardine North 400kV Substation (LWUP) – East of Scotland
Kincardine North – Wishaw 400kV Reinforcement (DWUP) – Central Scotland and East of Scotland
Gala North – Harker Area 400kV (CMN4) – Scottish Borders