HOUSEHOLDS face an average rise in their energy bills of up to £15 a year for the next decade as they pick up the tab for a £22billion upgrade to Britain's gas and electricity network.

Regulator Ofgem said the work – which includes laying undersea cables and maintaining gas mains – will ensure the UK's power network remains among the most reliable in the world and will create around 7000 jobs in the supply chain.

Average household bills will rise by £7 next year and by £11 to £15 by 2021 to pay for the investment, which is subject to consultation. National Grid said the plans do not allow it to put up its charges by enough to encourage the investment needed in the UK's infrastructure.

The proposals announced yesterday – which include connecting 80,000 households to the gas network for the first time – represent a much smaller amount than National Grid is understood to have asked for.

It wanted to spend £21bn on electricity transmission in the eight years from 2013, in order to connect new power plants across England and Wales, as well as an extra £9bn on gas pipelines.

However, Ofgem has said it can only spend £17bn, with a further £5bn if there is a need.

National Grid had suggested bills could increase by between £15 and £20 but Ofgem has restricted this under its "price control" regulation in a bid to keep costs down for consumers who have already been saddled with back-to-back hikes.

British Gas, which has 15.9 mil- lion residential customers, raised gas bills by 18% and electricity by 16% in August, while the UK's biggest household energy supplier, Centrica, predicted an average increase in bills of £50 this year – driven by rises in wholesale gas prices.

Meanwhile, Prime Minister David Cameron warned green energy policies sought by the Coalition could add more than £300 to the average domestic fuel bill by 2020.

Ann Robinson, director of consumer policy at uSwitch.com, said: "This is the start of a significant investment programme for our nation's energy infrastructure. The work is vital, but it will come at a cost to consumers.

"The average household energy bill is £1252 a year so it's not hard to see why an £11 increase will hurt. Already over one-third of consumers say household energy is unaffordable, while more than eight in 10 rationed their energy use last winter because of cost."

Ofgem chairman Lord Mogg said: "Britain faces an unprecedented need to invest to replace ageing infrastructure, meet environmental targets and deliver secure supplies."

However, a spokesman for the National Grid, said the level of investment approved by Ofgem was insufficient.

He added: "We believe these initial proposals will not appropriately incentivise the essential investments necessary to provide safe, reliable networks for UK consumers and avoid delays to the achievement of the UK's environmental targets."