National Grid ($NG) has introduced an ambitious five-year investment strategy, allocating up to 35 billion pounds sterling to enhance and expand its electricity transmission capacity across the UK. The initiative, known as the RIIO-T3 business plan, will take effect from April 2026 until March 2031, aligning with the nation’s commitment to transitioning to a cleaner energy landscape and ensuring that the grid is equipped to handle increasing energy demands. The strategic plan outlines a foundational investment exceeding 11 billion pounds focused on upgrading and maintaining the existing transmission networks.
Furthermore, it includes the initiation of the first three projects under the Accelerated Strategic Transmission Investment (ASTI) program. An impressive 24 billion pounds will be set aside for pipeline investments, which encompasses a significant 15 billion pounds dedicated to enhancing the capacity of the network. "Through this 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," stated National Grid Chief Executive Officer John Pettigrew.
He also emphasized that the company has already established crucial groundwork for the delivery of the plan by advancing ASTI projects, securing the supply chain, and financing the broader Group initiatives. The overarching goals of the company include connecting 35 gigawatts of new generation and storage capabilities to the grid, which is projected to save consumers 12 billion pounds in system constraint costs.
Additionally, these proposals aim for a 50% reduction in emissions compared to baseline levels from 2018/2019, alongside the creation of 55,000 new job opportunities by 2030. Analysts from RBC Capital Markets have noted that National Grid has previously indicated there would be significant optionality built within the plan, particularly in light of forthcoming connection reforms anticipated in January.
Hence, it is not expected that the complete 35 billion pounds will be utilized, with approximately 9 billion pounds of optionality integrated considering 11 billion pounds earmarked for baseline expenditures, which include asset health, maintenance, and the initial three ASTI projects, as well as an additional 15 billion pounds related to supplementary ASTI projects. National Grid is adamant about seeking a greater engagement with all stakeholders regarding the plan's implementation.
The draft and final decisions from the UK’s Office of Gas and Electricity Markets (Ofgem) are projected to be revealed in the summer and late 2025, respectively. Interestingly, shares of National Grid saw a dip of 1% on Wednesday midmorning..