UK households to fund record £30billion net zero overhaul of National Grid

National Grid owns the high-voltage electricity transmission network in England and Wales

Households will be forced to help foot the bill for a record £30billion overhaul of Britain’s electricity network.

National Grid said the massive investment was needed to cope with an expected jump in demand for power for electric cars, data centres and artificial intelligence. Plans will include laying thousands of miles of new cables by 2030 to connect wind farms with power-hungry cities.

It is also expected to controversially lead to more pylons being erected across the countryside. National Grid claimed the investment would lead to lower bills over time by reducing the UK’s reliance on imported energy. But chief executive John Pettigrew acknowledged that households would also help fund the investment, although he claimed it would have a “really small impact”.

The Grid, which owns the high-voltage electricity transmission network in England and Wales and the UK’s largest power distribution business, says the £30billion of investment will help create around 55,000 jobs. It plans to pump almost the same amount into its US arm.

The company announced a £7billion rights issue to help cover some of the cost. It also plans to sell its Isle of Grain plant in Kent, which is Europe’s largest liquefied natural gas terminal and a site of vital importance for energy imports, plus an onshore renewables business in the US.

“It is a really big moment for National Grid,” Mr Pettigrew said, adding the investment was “completely unprecedented on this scale.” Mr Pettigrew said that of the current average £1,800 annual energy bill, about £22 goes on electricity transmission. The plans would “enhance energy security and bring down consumer bills in the long term,” he went on.

The plans come as UK government has targeted a fully decarbonised electricity system by 2035 and has a legal obligation to achieve net zero by 2050. National Grid’s share price dived 9% in morning trading - wiping £3.7billion off its stock market value - after the plans were announced alongside its annual results.

The rights issue will be at 645 pence per share on the basis of seven new shares for every 24 existing shares, the company said. The group reported pretax profits of just over £3billion for the year to March 31, down 15%.

Russ Mould, investment director at AJ Bell, said: “It’s not a good look when a company reports a slump in profits and then goes cap in hand to shareholders, asking them to stump up £7billion. That’s exactly what’s happened with National Grid as it looks for financial support to boost its energy network investment. Some investors might view this as a bit cheeky, but others will be salivating at the chance to buy shares in a generous dividend payer at a big discount to the market price.”