As a child growing up in a village at the edge of the Welsh valleys outside Cardiff, John Pettigrew was nagged by his parents to switch the lights off whenever he left a room. Now, he’s part of a national effort to slash Britain’s energy use in the face of bills sent soaring by Russia’s invasion of Ukraine and resulting concerns about gas and electricity supplies.
Despite having collected a total of more than £30m in cumulative pay and benefits in his time as chief executive of National Grid, Pettigrew has not forgotten his parents’ advice. “I’m the same with my family now – making sure the thermostat is turned down a few degrees, doing the sensible things,” he says. “It is the right thing to do from an environmental [and] an affordability perspective. We were very supportive of the government and other bodies advocating for people to do that.”
Pettigrew has just ridden out a tense winter, marked by people having to choose between heating and eating and talk of power cuts. Last autumn, National Grid voiced concerns that Britons could experience blackouts as well as wallet-busting bills during the coldest months.
As it turned out, worries that Vladimir Putin would halt Russian gas supplies into Europe did not materialise and cold snaps were not prolonged, so the continent’s gas storage caverns could remain well stocked. “We came through the winter remarkably well,” Pettigrew says, in deep Welsh tones. “The weather was relatively mild and when we did see cold periods, the products that we developed were very useful.”
Those “products” were new technical tweaks that National Grid added to the formerly monolithic power system: a demand flexibility service, which paid consumers to shift their energy use away from periods of high usage, and contracts to keep coal plants on standby, at a cost of up to £420m. In the end, neither proved essential.
The spring weather may be taking its time to arrive, but Pettigrew is already turning his mind to next winter, with plans afoot to expand the flexibility service. But he believes it is still “a bit early” to say whether we should be concerned about supply shortages for next winter, with the quantities of gas imported to Europe in the coming months a major factor. Despite a recent easing in wholesale gas prices, he expects bills to remain above historical highs with “some tension in the system for a couple of years”.
Russia’s state-owned gas behemoth, Gazprom, has been busily trolling Europe, claiming that next winter could be harder.
Never before has the business of energy, and keeping lights on and homes warm, been as critical, and this previously staid business has been thrust into the public eye.
National Grid is a £42bn FTSE 100 company that operates Britain’s power infrastructure, and its assets are split roughly equally on both sides of the Atlantic. In an indicator of its low-carbon direction, 70% of its assets are in electricity, and 30% in gas.
Some of National Grid’s responsibilities will be nationalised later this year, when the spin-out of its electricity system operator (ESO) – which ensures that energy supply meets demand – is ratified in legislation. Negotiations on the price the government will pay National Grid for the ESO have yet to begin, Pettigrew says.
His desk at National Grid’s grandiose London headquarters overlooks Trafalgar Square. In the distance, down the Mall, we can see marquees being erected in preparation for next weekend’s coronation festivities, as Britain formally enters a new royal era. And Pettigrew, too, is planning his own new chapter for the country – albeit with a tad less pomp and ceremony.
He is trying to engage the public in the Great Grid Upgrade, the £54bn task of upgrading the pylons and cables connecting offshore wind and solar projects to the electricity network as part of the push for net zero. He faces a battle, with some communities – such as those opposing onshore connections to wind projects in East Anglia – resisting the upheaval of major infrastructure projects.
Pettigrew hopes to appeal to a sense of civic duty. “People are going to be asked to host infrastructure, and in a way they’re doing that on behalf of UK plc. It’s really important that they see the grid upgrade in the context of what’s going on across not just in the UK, but globally. It’s more than just looking after some electrical infrastructure: it’s actually about energy security and affordability, and tackling climate change.”
But the National Grid has come under fire from the energy industry, where renewables developers claim it has been glacially slow in connecting new projects: some saying it took up to 13 years to get hooked up. These developers hope to gain from the push to decarbonise, as every sector, from heavy industry to electric cars to home heat pumps, drives demand for electricity.
Pettigrew says connections are carried out on a first-come, first-served basis. But the 2030 target of delivering 50 gigawatts of offshore wind is fast approaching and he is pressing regulators to be allowed to proactively invest in building links. The amount network companies like his can charge customers for upgrades is regulated by Ofgem – the average household pays just over £300 a year for the cost of the network. “We can’t start any work on the network until someone signs a connection agreement – if we were able to do anticipatory investment we could get ahead of the curve.”
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Pettigrew is the ultimate National Grid lifer. He joined in 1991, shortly after it was privatised, as a graduate trainee on £14,000 a year. At the time there was just a single shared computer in the office.
The security pass on a blue lanyard around his neck bears a faded picture of his younger self, smiling and with fewer grey hairs. His three decades at the monopoly have included roles in engineering and operations and a period in the US, where National Grid has 20 million customers. He still spends much of his time there.
Pettigrew grew up in Pontypridd, a seat held by Labour for just over 100 years. Looking ahead to the next general election, he says he has had meetings with Keir Starmer and the other party leaders. The difference this time is that there is no imminent threat of renationalisation. Campaigning in 2019, then Labour leader Jeremy Corbyn said he planned to renationalise the National Grid if he came to power, without paying its full market value. This time, Labour’s plans stretch no further than the rather waffly Great British Energy, a public clean power company that Starmer has been at pains to say will be not be expropriating anything.
“Ownership hasn’t really been a debate we’ve had; it’s more what do we need to do as an enabler to the energy transition,” he says.
Last year, his pay package totalled £6.5m, which was labelled “gargantuan” by campaigners and far outstrips the FTSE average. Did he consider forgoing some of it, given the high bills consumers faced?
This one he straight-bats. “I’m very well paid as the CEO of National Grid. It is a huge company, both here and in the US. Remuneration is a question for the remuneration committee, which they consider on a regular basis.”
CV
Age 54
Family Two daughters
Education London School of Economics, Cardiff University, Harvard
Pay £6.5m in total last year, including salary of £1m
Last holiday The Lake District
Best advice he has been given Enjoy the journey, not just the destination
Phrase he overuses Reasonably unreasonable. “I’m always thinking what more we can do to get the best outcome for all our stakeholders.”
Biggest career mistake “My degree was in economics. It took me a while to realise I’m an engineer at heart. I should have done engineering.”
How you relax “With family and friends, travel and exercise.”
