National Grid plans to invest $75 billion in its infrastructure over the next five years, nearly half of it in New York and Massachusetts.
The UK energy company announced the plan May 23 with its year-end financial results and said the $35 billion investment in the two states would be over 60% higher than in the past five years.
National Grid also announced it would sell National Grid Renewables, its U.S. onshore renewables business, and Grain LNG, its UK LNG asset, as it focuses more closely on its energy networks.
In a news release, National Grid said the New York and Massachusetts projects would harden the electric grid, reduce emissions and provide benefits to both customers and local economies.
The company noted the Department of Energy in its 2023 National Transmission Needs Study forecast a need for a 255% increase in transmission development to support the two states’ anticipated clean energy growth.
The news release emphasized the investments in electric networks and the resulting benefits for states’ decarbonization goals. But the financial report indicates a little more than 40% of the $35 billion would be spent on natural gas infrastructure, including a proposed three-year, $5 billion modernization of National Grid’s downstate New York gas businesses.
Continued investment in gas infrastructure has been a friction point between utilities and decarbonization advocates. National Grid notes that the work planned would be for safety and reliability purposes and would provide environmental benefits by reducing leaks.
In total, National Grid said it plans to invest about $21 billion in New York through March 2029. More than $4 billion of this would go to the Upstate Upgrade, a portfolio of more than 70 transmission enhancements designed to increase reliability, resilience and capacity.
As it announced the upgrade in March 2024, the company called it the largest investment in the grid in its century-plus existence — building, rebuilding or modernizing more than 1,000 miles of transmission line. As a result, 45 substations would be built, rebuilt or modernized.
The New England investment would total about $14 billion and include smart meters, modernized infrastructure, hardening against extreme weather and quality upgrades to electric and gas assets. Part of this would be National Grid’s Electric Sector Modernization Plan, a $2 billion proposal submitted to Massachusetts regulators as part of the state’s drive to upgrade the grid and accelerate connection of renewables.
The dollar figures are approximate and are based on present UK-U.S. currency exchange rates.
The plan involves an equity raise of 7 billion British pounds, or nearly $9 billion.
The company’s share price, which recently traded near 52-week highs, took a dive after the plan was announced, closing 10.9% lower May 23 on the London Stock Exchange and 14.3% lower on the New York Stock Exchange.
For the fiscal year ended March 31, National Grid’s operating profit was down 8% from the previous fiscal year, its pre-tax profit was down 15% and its earnings per share were down 19%.
