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On 18 December 2024, National Grid plc's National Grid Electricity Transmission (NGET) business published its RIIO-T3 business plan, covering the period from April 2026 to March 2031. The plan details an investment of up to £35 billion over these five years and aims to connect 35GW of new generation and storage.
| Date | 18 Dec 2024 |
| Time | 07:00:04 |
| Category | Miscellaneous |
| ID | 4833Q |
18 December 2024
National Grid plc
RIIO-T3 Business Plan published: framework to deliver most significant step forward in the UK's transmission network for a generation
National Grid has today published the RIIO-T3 business plan for its National Grid Electricity Transmission (NGET) business, covering the period from April 2026 to March 2031. The submission follows extensive consultation with national, regional and local stakeholders.
Investing at an unprecedented level
The plan includes an unprecedented level of investment of up to £35 billion over the five years to March 2031, including:
· baseline investment of over £11 billion to maintain and upgrade our existing networks, alongside construction works for the first three of our Accelerated Strategic Transmission Investment (ASTI) projects where project assessments have been approved; and
· pipeline investment of around £24 billion, which includes around £15 billion to increase network capacity, most of which relates to the 14 further confirmed ASTI projects. Pipeline investment also includes additional potential projects that may be triggered by the UK government's evolving priorities.
Delivering a future-proofed, innovative and reliable transmission network
Altogether this ambitious plan enables NGET to:
· maintain world leading 99.9999% reliability levels;
· develop and deliver major network reinforcement and expansion projects, including the 17 ASTI projects, and the upgrade of c.3,500km of our existing overhead lines, nearly doubling the amount of power we can transfer around the country;
· deploy innovative technologies such as power control devices, and dynamic line ratings to maximise the capacity of our existing infrastructure;
· connect 35GW of new generation and storage, and 19GVA of large demand customers such as data centres and gigafactories, as well as creating a further 26GW of future connection options;
· help consumers avoid c.£12 billion of system constraint costs across the period;
· contribute to the group's wider UK investment which supports 55,000 more jobs by 2030; and
· deliver a 50% reduction in our own emissions versus a 2018/19 baseline, and biodiversity net gain equivalent to more than 8,000 acres of land, seven times the impact of RIIO-T2.
In line with Ofgem's guidance, the plan aligns with the National Energy System Operator's (NESO) Future Energy Scenario 2024 Holistic Transition pathway. The optionality in the plan also means it can be adapted to the UK government's clean power plan. Whilst the specific investments required will be clarified through NESO's connection reform process in 2025, the RIIO-T3 plan further underpins and is consistent with our expected £60 billion investment across the group for the five years to March 2029.
The NGET plan includes the financial framework that we believe is needed to provide an attractive and investable proposition that can compete with the international demands for capital. We have clearly set out why we believe a real 6.3% (at 60% gearing, CPIH stripped) allowed cost of equity is the right level to deliver this in RIIO-T3. We also set out the levels of cash generation necessary to support investment levels and propose a number of incentive mechanisms that will deliver benefits to consumers and networks during RIIO-T3.
Commenting on the final Business Plan, John Pettigrew, CEO of National Grid plc, said: "This plan represents the most significant step forward in the electricity network that we've seen in a generation. Through it 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.
It is an ambitious plan, set to future proof the network with strategic capacity and flexibility for the longer term. We've laid the foundations for its delivery through the steps we've already taken to progress ASTI projects, secure the supply chain, and fund the wider Group. We have done this whilst keeping a relentless focus on consumer bills and affordability.
It is now critical that Ofgem plays its part in developing an investable framework that will allow us to deliver at the unprecedented scale and pace that is needed to meet the UK's ambitious climate goals."
We look forward to engaging further with all our stakeholders, ahead of draft determinations from Ofgem in summer 2025, and final determinations in late 2025.
For additional information, please follow this link to the RIIO-T3 section of our website.
Notes
Allowed cost of equity of 6.3% CPIH real at 60% gearing is in line with Ofgem's Sector Specific Methodology Decision range of 4.57% to 6.35%. Translates to 5.8% CPIH real at 55% gearing.
Business plan investment of up to £35 billion relates to total expenditure (or totex) and is quoted on a 2023/24 price base.
The 17 ASTI projects form a key part of The Great Grid Upgrade, which is building the significant new electricity network infrastructure required to connect offshore wind and reduce the UK's reliance on fossil fuels.
Enquiries and contacts
Investors and Analysts:
Angela Broad +44 (0) 7825 351 918
Tom Edwards +44 (0) 7976 962 791
Media:
Ben Davis +44 (0) 7971 539 999
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