Underlying profits of £1.8 billion announced today by National Grid for this year’s first half are a “sham”, according to the head of Unite, one of Britain’s biggest unions.
In its portfolio the nation’s backbone transmission provider has regional distribution activities in south Wales and east and west English Midlands, plus US operations. Privatised in the 1980s, the group’s investors include state authorities from Abu Dhabi and Norway.
The group is valued at around £35.8 billion by LSE investors.
Capital investment for full year 2023-24 is budgeted at £3.9 billion, according to today’s announcement, £70 million higher than the prior period at nominal constant currency rates.
Projects benefitting since April from refurbishment or new measures included 17 upgraded or new ASTI – (Accelerated Strategic Transmission Investment) ventures, approved by Ofgem’s RIIO-ED2 spending regime.
The impending ASTI works include two Eastern Green Link trans-border projects:
- Eastern Green Link 1 is covered by a joint venture agreement signed in August with ScottishPower’s transmission offshoot,
- Eastern Green Link 2, twinned with SSE’s Scottish Hydro Transmission division, agreed in June
The enterprise said it has chosen suppliers for converter stations & cables for the offshore components of both projects. South of Hadrian’s Wall, it has received planning consents for the projects’ coastal landing stations.
Highlights of the half year identified by group CEO John Pettigrew included welcoming
- recommendations for a UK-wide spatial energy plan, as put forward in a report by the Electricity Networks Commissioner, and aimed at cutting waits in delivering key transmission infrastructure.
- the first year of new price controls under RIIO-ED2, running for five years until March 2028.
- last month’s passing into UK law of the Energy Act 2023
The company also published its ‘Delivering for 2035’ policy paper, outlining five areas where action by the UK government and Ofgem is needed to ensure network decarbonising by 2035.
Pettigrew noted £53 million of efficiency savings secured. That half year figure boosts to a cumulative £426 million of achieved savings, higher than £400 million target committed to by next spring.
The chief executive hailed “solid” results. Pettigrew wrote: ”Capital investment in our regulated networks reached a record £3.5 billion in this half year, as we step up our investment in 17 major onshore and offshore transmission projects in the UK.
Policy reforms now observable on both sides of the Atlantic pleased the group, Pettigrew said. “We’re ready to meet the opportunities, and are set up to tackle the challenges ahead, to deliver a clean, fair and affordable energy future for all.”
But Unity boss Sharon Graham was scathing. “These results show the true reality of our broken energy system” she said in a statement.
“A monopoly company, sold off on the cheap by politicians to the private sector, making excess profits that it passes back to its shareholders rather than investing in services and infrastructure for the public good. The irony that two of the biggest shareholders are the governments of Norway and Abu Dhabi will not be lost on the public who will see this as the sham it is”.
