Yahoo Finance National Grid profits jump amid row over delays to crucial net zero projects
National Grid has posted a 15pc jump in profits amid a row over delays connecting wind and solar farms to the electricity network.
The FTSE 100 company, which owns and operates Britain’s electricity transmission system, said underlying profits rose from £4bn to £4.6bn in the year to March 31.
It comes as National Grid is under pressure to ramp up investment in Britain’s electricity network and speed up connections. Renewable energy developers complain they face waits of up to a decade to be connected to the grid, delays that are slowing Britain’s net zero push.
Jonathan Brearley, chief executive of industry regulator Ofgem, on Tuesday warned that “unacceptable” waiting times were putting at risk Britain’s ambition to make the electricity network carbon-free by 2035.
John Pettigrew, National Grid’s chief executive, said the operator was committed to net zero but argued fundamental regulatory changes were needed to resolve the connection issues.
He said the switch to greener power could result in “security of supply, lower energy bills and job creation”.
He said: “As a network, we recognise that we’re a key enabler to that. But from our perspective, we think fundamental regulatory reform is needed.”
National Grid has promised to spend £40bn on upgrades from 2021 to 2026. The company claims it is on course to build more infrastructure in the next seven years than it did in the preceding 30.
However, he said more could be spent if rules were changed to allow the company to invest proactively, rather than waiting for demand to materialise.
Ofgem has also pledged to clear any regulatory barriers getting in the way.
At present, the “first come first serve” grid connection system means shovel-ready projects with investors and planning permission must wait behind schemes with little chance of going ahead.
Developers say this encourages “pay and spray” applications where companies secure places in queues in multiple areas despite having no firm intention of proceeding.
Ministers have been warned the backlog issue threatens investments in major energy projects.
On Monday, the Grid published plans to reach a “net zero” electricity network by 2035, which will include overhauling the current system for connecting.
National Grid’s proposed fixes, alongside investment, include letting developers leave the queue without penalty and putting in place a checkpoint-style system that will only allow projects to move forward as they progress, for example by getting planning permission.
Battery storage sites will also be given priority.
The Grid expects that 70pc of projects currently in the pipeline with a connection date of 2026 or later will be able to connect two to 10 years earlier thanks to these changes.
However, it is under pressure to deliver, with Ofgem understood to be considering taking away National Grid ESO’s role in centrally planning grid upgrades if there is not tangible improvement by 2025.
National Grid’s profits in the year to March were partly boosted by “strong performance” from the Grid’s interconnector business – where revenues jumped from £135m to £355m – after the energy crisis prompted the UK to export record amounts of power to EU countries including France last summer.
French demand leapt last year as the country’s nuclear fleet was partially taken out of action by a litany of maintenance problems.
The Grid also benefited from an insurance payout following a fire at its IFA interconnector site in Sellindge in November 2021.
