National Grid has announced a plan to invest around £60bn in networks in the next five years, with over £30bn of this amount in the UK.
The cash will “unlock economic growth and enable the increasingly digital, electrified and decarbonised economies of the future” and support 55,000 more UK jobs by the end of the decade.
To finance this “unprecedented scale of investment and growth”, National Grid is planning a £7bn fully underwritten rights issue.
Alongside the new five-year financial framework, National Grid said it is streamlining the business including selling National Grid Renewables, its US onshore renewables business.
The $60bn investment commitment was announced at the same time National Grid published its 2023 financial results, where underlying operating profit of £4.8bn was up 4% at actual exchange rates (6% at constant currency).
This was principally driven by growth in revenues in UK Electricity Transmission through the RIIO-T2 price control, non-recurrence of Western Link liquidated damages, and higher rates in New York and New England.
Statutory operating profit for continuing operations was down 8% to £4.5bn, principally driven by non-cash exceptional charges in 2023/24 versus gains on disposals (NECO and Millennium investment) in the prior year; partly offset by favourable timing and commodity swings and higher underlying performance versus the prior year.
National Grid chief executive John Pettigrew said: “We will be investing £60bn in the five years to the end of March 2029 – that’s nearly double the level of investment of the past five years.
“We expect this significant step-up in capital investment will deliver annual group asset growth of around 10%, and 6%–8% underlying EPS CAGR from a 2024/25 baseline, supported by a comprehensive financing plan that includes a £7bn equity raise.”
He added: “Our new five-year investment plan will deliver long-term value and returns for our shareholders, support over 60,000 more jobs, and accelerate the decarbonisation of the energy system for the digital, electrified economies of the future.
“Our readiness to take this step is underscored by another year of strong financial and operational performance, with underlying operating profit and underlying EPS both up 6% at constant currency, with record investment of £8.2bn across the Group.
“In the UK, our 17 major onshore and offshore transmission projects are moving ahead at pace, and in the US our $4bn ‘Upstate Upgrade’ is underway representing the largest investment in New York’s electricity transmission network for over a century.
“Our sixth interconnector, the Viking Link to Denmark, came online in December and is the world’s longest onshore and subsea HVDC cable, demonstrating the world-class capabilities within National Grid.”