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UK's National grid £4,879,000,000 profit

4C Offshore | Chris Anderson
By: Chris Anderson 18/05/2023 National grid

National Grid, a leading energy transmission and distribution company, today announces its Full Year results for the period ended 31 March 2023.  Despite  repositioning of its portfolio after completing the £3.1 billion sale of the Narragansett Electric Company (NECO) to PPL Corporation in May 2022 and  the sale of a 60% stake in UK Gas Transmission and Metering (UK Gas Transmission) to a consortium led by Macquarie Asset Management and British Columbia Investment Management Corporation in January 2023 it generated an operating profit of £4.879 billion, and a profit before tax of £3.59 billion.

This follows Monday's announcement that
the UK hit a major milestone as it passed the one trillionth kilowatt hours (kWh) of electricity generated from renewable energy sources.
 
National grid reported that underlying operating profit of £4.6 billion was up 15% at actual exchange rates (10% at constant currency). This reflects a full year contribution from UK Electricity Distribution; good operational performance across our US regulated businesses; higher contribution from National Grid Ventures (NGV); and increased property sales; partly offset by a shorter period of NECO ownership (two months), and our community support package.


Statutory operating profit for continuing operations was up 12% to £4.9 billion, benefitting from the gain on sale of NECO and their Millennium investment, insurance recoveries following the IFA fire, partly offset by adverse

commodity re-measurements. Consequently, statutory EPS for continuing operations was up by 22% compared to the prior year.


Shareholders can expect a recommended final dividend of 37.60p to bring full year dividend to 55.44p, up 8.77% and in line with policy.


National grid also reported a record capital investment programme across their energy networks including a Capital investment of £7.7 billion for continuing operations up £1.0 billion at actual exchange rates (8% at constant currency) including £266 million of non-cash lease additions in the US. This investment was principally driven by a full year of UK Electricity Distribution ownership, as well as higher levels of investment to drive forward the energy transition and deliver energy security.


This included New York where they  have started the upstate New York transmission project Smart Path Connect; The UK Electricity Transmission for our London Power Tunnels 2 (LPT2) project; higher investment for our Sellindge (IFA) converter station rebuild; investment in our Viking interconnector to Denmark; and their Isle of Grain expansion project. This was partly offset by a shorter period of NECO ownership (two months).


In April 2023, established a new business unit, Strategic Infrastructure, to deliver 17 major electricity transmission

projects to help meet the UK government's 50 GW offshore wind target.


National grid also announced the early return of a further £100 million of interconnector revenues to UK customers where they collected above their cap (subject to Ofgem consent). This is in addition to the £200 million of revenues that National Grid previously announced.


Citing that they were delivering on responsible business and net zero commitments, they were able to show a further  686 MW of renewable energy capacity to our transmission and distribution networks across our UK and US businesses were connected, as well as a bid solicitation in New York for 1.3 GW offtake from their offshore wind venture with RWE which, if successful, will provide over 4,600 jobs and reduce New York State's power sector emissions by up to 5%.


John Pettigrew, Chief Executive, said: "This has been another year of significant progress and strategic change for National Grid with good results demonstrating excellent execution against our key priorities. A record £7.7 billion has been invested in building clean, smart energy infrastructure and maintaining world class reliability across our networks.


We've supported our communities, announcing the early return of £100 million of interconnector revenues today on top of £200 million we've already committed to return, whilst giving a further £65 million to our most vulnerable customers. A further £236 million of operating cost efficiencies during the year has helped to mitigate the impact of high energy prices.


As we look to the future, there has never been a more exciting time to be at the heart of the energy industry. The

strategic pivot we announced in 2021 is now complete, enhancing our critical role at the heart of the energy transition. The visibility of growth has been strengthened by the new five-year RIIO-ED2 price control, $3.8 billion of additional longer-term investment for our US business to drive greater connection and delivery of clean power, and Ofgem's recent decision to award us 17 major transmission projects to enable greater levels of offshore wind connection in the UK.


The opportunities for future growth are considerable, and we will continue to work closely with governments and

regulators to drive the energy transition forward, achieving positive change for our communities and consumers, and a clean, fair and affordable energy future for all."


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