The National Grid Electricity System Operator has outlined a scenario which could see the need for three-hour outages (PA)
(Picture: PA Archive)Soaring profits at National Grid and plans for a major payday for shareholders at British Gas owner Centrica today piled pressure on the energy industry is do more to support vulnerable customers and avoid blackouts this winter.
National Grid, which operates the electricity network, pledged to raise spending on critical infrastructure to £40 billion by 2026, up from previous plans for £30 billion to £35 billion. It came as profit soared 50% to £1.6 billion.
CEO John Pettigrew told the Standard that it was a “critical time” with “investment in the energy industry absolutely essential”.
He said the company expected “sufficient generation to meet demand” and he was not expecting limits on household electricity supply, although it has well-practised emergency procedures that have been in place for “the last 20 or 30 years,” pointing out “it was not something new” to prepare for such measures, while there were “thousands of engineers” focused on preparing the grid for the winter.
Pettigrew added that longer-term spending would result in a more secure and resilient network, and said the £3.9 billion spent in the first half of the year represented “a million pounds every single hour of every single day invested in clean energy transition.”
“Investing in the network enables you to connect with low-carbon energy, which will help reduce prices, reduce dependency on world gas and increase energy dependence in the UK.”
Part of National Grid’s spending will go on the £1 billion London Power Tunnels project, which is being built between Wimbledon and Crayford and will help bring electricity into the capital from the East Coast. Its profits were lifted by revenue generated from a new cable through the North Sea linking the UK’s electricity grid with Norway’s, and there are plans for a similar connection with Denmark.
National Grid receives a proportion of all energy bills as its revenue. These network charges are typically about 10% of a household bill. It announced plans in May to return £200 million to customers and last week it set up a £50 million customer support package.
Centrica, the owner of British Gas, announced plans to return £250 million to investors via a share buyback, its first since 2014. It also increased its spending on customer support by £25 million to £50 million.
It reopened a major gas storage facility off the coast of Yorkshire this autumn. Even with mild October weather, Centrica expects overall profits at the top end of forecasts, although it said operating profit its retail division would be “lower than current expectations” as people keep the heating off even as the autumn nights draw in.
Centrica’s shares rose 6p, or 8%, to 84p and the top of the FTSE 100, helped by the capital return plan.National Grid was up 6.6p, or 0.7% to 993p.
