National Grid in £60bn power plan
National Grid is planning to spend up to £60bn ($80bn) in the UK and US over the next five years to upgrade the power grid.
The company, based in the UK, will spend £30bn in its home market and £28bn ($35bn) in the US, with 85% invested in connections for renewable energy such as solar and wind power to meet the increased demand from applications such as AI data centres.
The investment is accompanied by a £7bn rights issue that has seen the share price of the company fall 20% to approach its lowest level in the last five years.
“Artificial Intelligence (AI) and advanced computing are putting significant demands on power systems. This is a development we have been tracking for some time, along with other new demands on the horizon for energy-intensive industries such as giga factories, data centres and biopharmaceuticals,” said John Pettigrew, CEO of National Grid.
“These demands are challenging the independent system planners in the UK and the US to revise their forecasts and plans for new generation. Ensuring our transmission is in the right place at the right time is an essential element to meeting these future demands, and our projects and plans are well aligned with the Grid’s wider requirements.”
“Nevertheless, as an industry, utilities are having to refresh some of our assumptions on demand growth. In the UK demand response programmes balance supply and demand, mostly due to the variability of wind and solar resources. There is potential for greater use of such programmes, and we expect that we will deploy them in the US as more smart meters are installed to enable the response to be calibrated. However, growing demand – particularly at the times of system peak – makes the interplay between the electricity grid and the natural gas network an area of particular focus.”
The US investment in particular has been driven by regulatory requirements.
“The announcement is a clear illustration that National Grid is committed to playing our part in achieving the ambitious decarbonization targets that New York and Massachusetts governments have set,” said Pettigrew.
“The increased investment follows positive engagement with our regulators in these states, reflecting a willingness to upgrade electricity networks to provide long term affordable energy to all.”
According to the US Department of Energy (DOE), lack of transmission infrastructure can directly contribute to higher electric bills, and more frequent and longer power outages. Preliminary findings from DOE’s National Transmission Needs Study also found that developing new transmission in the New York-New England corridor would not only improve reliability, but also support the increasing electric demand in the region. The federal analysis found the region needs a 255% increase in transmission development to support the clean energy growth expected under New York and Massachusetts policies.
In New York, National Grid is investing around $21 billion between now and 2029. Among those investments is the Upstate Upgrade which comprises more than 70 transmission enhancement projects across Upstate New York to improve reliability and resilience.
“This landmark investment will transform the energy grid to meet growing energy needs and is a much-needed piece of the puzzle to support the clean energy transition,” said National Grid New York President Rudy Wynter. “The money we are spending to make these upgrades is necessary to deliver renewable energy to homes and businesses across New York.”
In New England, the five-year investment will total roughly $14 billion with a roll out of smart meters alongside modernizing the energy infrastructure to make it less susceptible to extreme weather events.
One such proposed project, the Massachusetts Electric Sector Modernization Plan (ESMP) would create a path to upgrade and expand the electric grid and accelerate the connection of renewables to the grid.
If you enjoyed this article, you will like the following ones: don't miss them by subscribing to :
