National Grid unveiled an "unprecedented" five-year plan to invest up to 35 billion pounds sterling in its electricity transmission business to upgrade and expand the UK's electricity network. The UK-headquartered electricity and gas utility company's RIIO-T3 business plan, covering the period from April 2026 to March 2031, is designed to support the country's transition to clean energy, future-proof the grid, and meet growing energy demands.
The plan comprises a baseline investment of more than 11 billion pounds for maintenance and upgrades of existing transmission networks, along with building the first three projects under the Accelerated Strategic Transmission Investment, or ASTI, program. Meanwhile, 24 billion pounds will be earmarked for pipeline investments, including 15 billion pounds to enhance network capacity. "Through [the business plan] we will nearly double the amount of energy that can be transported around the country, support the electrification of the industries of today and tomorrow; create new jobs; and support inward investment for the UK," said National Grid Chief Executive Officer John Pettigrew.
"We've laid the foundations for its delivery through the steps we've already taken to progress ASTI projects, secure the supply chain, and fund the wider Group." The company aims to connect 35 gigawatts of new generation and storage, helping consumers save 12 billion pounds in system constraint costs among other goals.
The proposals also aim to cut emissions by 50% compared to 2018/2019 baseline levels and to create 55,000 new jobs by 2030. Analysts at RBC Capital Markets noted that National Grid had previously highlighted there would be a significant amount of optionality embedded within the plan, given connection reforms expected to come in January.
As such, they would not expect the full 35 billion pounds to be spent, with approximately 9 billion pounds of optionality built in, considering the 11 billion pounds for baseline expenditure and a further 15 billion pounds mainly relating to additional ASTI projects. "NG continues to push for ODIs to have a more material input than in RIIO-T2; however, we still expect that total expenditure will be the key driver of outperformance for the next regulatory period." National Grid said it will further engage with all stakeholders regarding the plan.
Draft and final determinations from the UK's Office of Gas and Electricity Markets, or Ofgem, are expected in summer and late 2025, respectively. Shares were down 1% on Wednesday midmorning..