Sunday, June 26, 2022

National Grid’s profits double to £3.4bn amid cost of living crisis

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Energy network operator National Grid has reported that its annual profits have more than doubled to £3.4 billion.

The company, which maintains and invests in infrastructure rather than distributing energy, said pre-tax profits rose 107 percent in the year ended March.

Much of the surge came from National Grid’s £7.8 billion purchase of Western Power Distribution (WPD). Earlier this month, WPD was fined £15million after its support for vulnerable customers during blackouts was deemed “completely unacceptable”.

Excluding one-off costs, National Grid’s underlying pre-tax profit rose 16 per cent to £3.1bn.

The energy industry faces an intense test as soaring gas and electricity bills put increasing strain on household finances.

The government is urged to announce a windfall tax for oil and gas producers in the North Sea, which have seen rising profits as energy prices rise.

Announcing its results on Thursday, National Grid claimed it would become the biggest investor in the transition to a green economy in the FTSE stock index.

National Grid chief executive John Pettigrew said the company wants to offset this by keeping bills low for customers.

It comes during a transitional period for the company, which has agreed to sell one of its units to the government to set up a new agency that will oversee the grid system.

The company will invest £24bn in green projects over the next five years to decarbonise energy grids in the UK and elsewhere.

It is part of a £30 billion to £35 billion investment plan.

“This is a record investment for National Grid, I think it makes us the largest investor in the energy transition on the FTSE.

“It only gives you a glimpse of the scale of investments we plan to make over the next few years.

“Of course we will try to do this as efficiently as possible to keep bills down for customers.”

In the Queen’s Speech last week, ministers included plans for a new agency that will run the electricity system.

As a result, the government will buy National Grid’s Electricity System Operator division from the company.

“We’re actually very pleased,” said Mr. Pettigrew.

“From our perspective, it’s a relatively small part of National Grid, but it will still play an important role in the energy transition.”

He said the deal should be completed by 2024. The sales process is starting at the moment, but things will move fairly slowly until MPs pass new legislation.

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