National Grid has announced an ambitious plan to invest approximately £60 billion in networks over the next five years, with over £30 billion earmarked for the UK, signaling a significant commitment to bolstering infrastructure and accelerating the transition to a digitalized, electrified, and decarbonized economy.
This substantial investment is poised to stimulate economic growth and create an estimated 55,000 additional jobs in the UK by the end of the decade, underscoring National Grid's pivotal role in driving forward the country's sustainable development agenda.
To facilitate this unprecedented scale of investment and growth, National Grid intends to launch a £7 billion fully underwritten rights issue. This strategic move reflects the company's robust financing strategy aimed at fortifying its financial position and supporting its ambitious investment plans.
In tandem with the new five-year financial framework, National Grid has outlined plans to streamline its business operations, including the divestment of National Grid Renewables, its US-based onshore renewables business.
The announcement of the £60 billion investment commitment coincided with the release of National Grid's 2023 financial results, showcasing a 4% increase in underlying operating profit to £4.8 billion at actual exchange rates (6% at constant currency).
John Pettigrew, Chief Executive of National Grid, articulated the company's vision for the future, stating, “We will be investing £60 billion in the five years to the end of March 2029 – that's nearly double the level of investment of the past five years.” He emphasized the company's expectation that this substantial increase in capital investment will yield annual group asset growth of around 10% and achieve a 6%-8% underlying EPS CAGR from a 2024/25 baseline.
Pettigrew underscored the long-term value and returns expected from the new investment plan, emphasizing its potential to support job creation and expedite the decarbonization of the energy system, aligning with the evolving needs of digital, electrified economies.
He highlighted National Grid's strong financial and operational performance, with record investment of £8.2 billion across the Group in the previous year. Notable projects include major transmission projects in the UK and the commencement of the $4 billion ‘Upstate Upgrade' in the US, representing the largest investment in New York's electricity transmission network in over a century.
