Russ Mould, investment director at AJ Bell, said: “The market verdict on Ofgem’s decision to approve £28 billion of new investment in the energy grid is not overwhelmingly positive, with shares in National Grid and SSE trading lower on the announcement.
“Prior to the publication of this plan, the industry pushed back on the amount it was allowed to achieve in returns, and it doesn’t seem to have got what it asked for.
“Given Ofgem’s announcement might lead to households paying materially higher energy bills, complaints from utility companies may not wash with many.
“The scale of the investment required means National Grid and SSE need the backing of shareholders, and to do that they need to be able to offer a reasonable level of return.”
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