National Grid has announced an unprecedented £35 billion investment plan to modernise electricity transmission infrastructure across England and Wales, marking the largest upgrade initiative in a generation. The ambitious proposal, submitted to energy regulator Ofgem, aims to double the current five-year regulatory period spending to meet growing clean energy demands.
The sweeping infrastructure enhancement programme could see household energy bills increase by approximately £21 annually. National Grid is pursuing a 6.3 per cent return on investment, positioning itself at the upper limit of Ofgem’s prescribed range of 4.57 to 6.35 per cent for network operators.
The investment strategy allocates £11 billion towards existing infrastructure improvements and three new transmission projects. An additional £14 billion has been earmarked for 14 future developments, subject to Ofgem’s approval during the five-year spending period.
The proposed upgrades will enable the connection of 35 gigawatts of new generation capacity, effectively doubling the network’s power transmission capabilities. Large industrial users, including steel plants, railways, data centres, and gigafactories, will benefit from enhanced grid access, with connection capacity increasing significantly from the current 5.5 GVA to 19 GVA.
National Grid’s chief executive, John Pettigrew, emphasised the transformative nature of the proposal, stating it represents “the most significant step forward in the electricity network that we’ve seen in a generation.” The company projects £12 billion in constraint cost savings over the five-year period, addressing issues where renewable generators currently face shutdown to prevent grid overload.
The ambitious plan forms part of a broader £60 billion investment strategy announced earlier this year, which included a landmark £6.8 billion rights issue. Market response saw National Grid shares close down 10½p at 926¼p, reflecting a 1.1 per cent decline.
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