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National Grid to spend up to £19bn to ‘rewire’ Britain for net zero

national grid
national grid

National Grid is to spend up to £19bn on new pylons and transmission systems across the countryside as it “rewires the nation” for the net zero era, the company has said.

John Pettigrew, National Grid’s chief executive, said the money would be spent upgrading and expanding the UK’s creaking power transmission system to ensure it is ready for the surge in demand as the country shifts to net zero.

National Grid predicts its wires will carry up to 80pc of the total energy used by UK households by 2050, compared with just 20pc now.

The huge increase will come as gas for heating homes and petrol or diesel for transport will be almost entirely replaced by electricity.

Networks of new cables are needed to power the heat pumps destined to replace Britain’s 25 million domestic gas boilers and the electric vehicles that will replace the 32 million petrol and diesel vehicles on Britain’s roads.

National Grid plans to spend £3bn on infrastructure by 2026 and will spend billions more as its programme of investment accelerates in the years up to 2050.

A spokesman said its “best estimate for total outturn investment (in £bn) is in the mid-to-high teens range”, suggesting it will spend between £15bn and £19bn. They added that current estimates were uncertain, given many projects were still in the planning stage.

The company has already set out plans for 17 key infrastructure projects under its Accelerated Strategic Transmission Investment framework, much of which is aimed at connecting new windfarms in Scotland or offshore to the cities that need the electricity they generate.

Four projects are already at an advanced design stage including Eastern Green Link 1, a 109-mile subsea cable between East Lothian and County Durham, and the Eastern Green Link 2, an onshore cable link from Aberdeenshire to North Yorkshire.

Two others, the Bramford to Twinstead link and the Yorkshire Green link, involve reinforcement of existing lines.

The shift to net zero will mean a sharp decrease in the UK’s greenhouse gas emissions but at the price of potentially thousands of new pylons intruding on landscapes.

Mr Pettigrew said he was “hugely empathetic” to the impact of new pylons and cables on local communities.

He said: “What we try and do is balance the cost and the environmental impact and what communities feel about it.

“We do huge amounts of consultation but ultimately, we have to make a recommendation to the Secretary of State, and they determine whether we’ve got that balance right.”

Both the Government and the Labour Party are supportive of plans to expand Britain’s grid.

The Government has drawn up plans to halve the current 14-year average time that it takes for a new energy project to get built and then linked up to the grid.

Ed Miliband, shadow energy secretary, has promised to “rewire Britain”, echoing the language used by National Grid.

John Pettigrew
National Grid chief John Pettigrew called on ministers to accelerate planning reforms and cut red tape to avoid delays - Jason Alden

Mr Pettigrew called on ministers to accelerate the planning reforms and cut the red tape currently slowing such developments.

He acknowledged that many people would have their homes and landscapes impacted by new pylons and cables and proposed offering “community benefits” to mollify them.

Mr Pettigrew said: “It’s important given the scale of infrastructure that needs to be built in the UK that local communities do see some real benefit.”

Ben Wilson, National Grid’s chief strategy officer, last month suggested to The Telegraph that rural homeowners who are impacted by new electricity pylons and cables could be offered home insulation, heat pumps and other energy-efficiency measures.

Mr Pettigrew said meeting net zero targets meant a massive expansion to the existing high-voltage transmission network, which already includes 5,000 miles of overhead lines carried on 22,000 pylons, some up to 623 feet tall.

There are another 70,000 smaller pylons in the distribution network connecting to homes.

Meanwhile, the UK government is expected to dramatically hike the prices for power offered to offshore wind farm developers after the disastrous failure of its last allocation round where  no companies came forward.

The government had set a “strike price” of £44 per megawatt hour – guaranteeing wind farm operators this as a minimum price for electricity from new wind farms.

However, the sector was hit by inflation over 40pc and no developers entered bids for projects in the latest round. The failure put the UK’s offshore wind programme, which is central to net zero, back by a year.

Claire Coutinho, the Energy Secretary, is widely expected to raise the minimum price to at least £70 when the next allocation round is announced later this month. The extra cash would be added to consumer bills.

A Department for Energy Security and Net Zero spokesman said: “We are committed to a successful next auction round that includes offshore wind. We will be publishing the administrative strike price later this month.”

Mr Pettigrew’s comments came as National Grid’s half-year results showed an underlying operating profit of £1.8bn – a decline of 15pc.

The FTSE 100 company, which is valued at around £42bn, said the drop was caused by land sales and insurance payouts that gave a one-off lift to its previous results.

Hinkley Point C nuclear power station
Recent spending includes work on 116 new pylons to connect the new Hinkley Point C nuclear power station to the grid - Daniel Leal/AFP

The company also reported a sharp increase in capital spending, with £800m spent in this half year alone on its high-voltage electricity transmission network.

Recent spending includes work on 116 new pylons to connect the new Hinkley Point C nuclear power station to the grid ahead of its expected start of power generation sometime after 2028.

A £1bn London power tunnels project, which involves drilling a 20-mile tunnel for cables deep under south London from Wimbledon to Crayford, also hit a milestone with tunnelling now completed and cabling to follow.

Mr Pettigrew, who started as a graduate trainee with National Grid in 1991, said that those projects were just the start.

National Grid’s income comes largely from consumer power bills with the average household paying roughly £300 a year for the cost of the network.

It also has extensive transmission networks in Eastern US, where it serves 20 million customers, meaning its assets and capital spending are split roughly equally on both sides of the Atlantic.