18th Dec 2024 09:17
(Alliance News) - National Grid PLC on Wednesday laid out proposals to invest up to GBP35 billion in its electricity transmission network between 2026 and 2031.
The London-based electricity and gas supplier intends baseline investment of over GBP11 billion to maintain and upgrade existing networks, plus pipeline investment of GBP24 million.
The latter includes around GBP15 billion to increase network capacity, and also includes additional potential projects that may be triggered by the UK government's evolving priorities.
National Grid said the framework proposals to UK energy regulator Ofgem represent an "unprecedented" level of investment.
The plans are included in National Grid's RIIO-T3 business plan for its National Grid Electricity Transmission business. It covers April 2026 to March 2031.
Chief Executive John Pettigrew called the "ambitious" plan the "most significant step forward in the electricity network that we've seen in a generation."
"Through it we will nearly double the amount of energy that can be transported around the country, support the electrification of the industries of today and tomorrow; create new jobs; and support inward investment for the UK."
Under the plans, National Grid will develop and deliver major network reinforcement and expansion projects, including the 17 Accelerated Strategic Transmission Investment projects, and the upgrade of around 3,500 kilometres of existing overhead lines, nearly doubling the amount of power it can transfer around the country.
Pettigrew said it is now "critical" that Ofgem plays its part in developing an investable framework that "will allow us to deliver at the unprecedented scale and pace that is needed to meet the UK's ambitious climate goals".
National Grid asked the regulator to approve a real 6.3% allowed cost of equity at 60% gearing to fund the RIIO-T3 plan. This is at the top end of Ofgem's sector specific methodology decision range of 4.57% to 6.35%.
The company said it will work with Ofgem ahead of the regulator's draft determinations for new five-year period in the summer next year and its final determinations in late 2025.
Shares in National Grid were 0.3% lower at 933.72 pence each in London on Wednesday morning.
By Jeremy Cutler, Alliance News reporter
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