REG - National Grid PLC - National Grid - final RIIO-ED2 business plans

National GridAnnouncement

01/12/2021 09:15

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RNS Number : 1903U  National Grid PLC  01 December 2021

 

1 December 2021

 

National Grid publishes final RIIO-ED2 business plans

 

Western Power Distribution (WPD), the recently acquired UK Electricity
Distribution business of National Grid, will today submit its final business
plans to Ofgem for the 2023-2028 RIIO-ED2 period. These plans have been
developed following our largest ever consultation process with over 25,000
stakeholders who have provided unparalleled scrutiny in co-creating them.

 

The plans include a financial framework that takes account of recent
regulatory precedent as well as the uncertainty around the pace of the energy
transition and the impact it will have on electricity distribution investment.
Given this, it is critical for all stakeholders that we have the right
incentives, and an appropriate level of return, to attract the investment
required to enable net zero goals.

 

WPD's plan has a baseline totex spend of £6.7bn over the five years. This
investment represents an annual average step up of nearly 30% compared to ED1
levels, which will fund our business plan commitments to provide the system
capability to cater for a further 1.5 million EVs and 600,000 heat pumps,
whilst maintaining strong reliability and resilience across our networks.

 

We look forward to engaging further with all our stakeholders as we explain
and debate our plans, including through the open forums from March 2022, ahead
of draft determinations from Ofgem in summer 2022, and final determinations in
late 2022.

 

CONTACTS

Investors and Analysts

 

 Nick Ashworth   +44 (0) 7814 355 590
 Angela Broad    +44 (0) 7825 351 918
 Jonathan Clay   +44 (0) 7899 928 247
 James Flanagan  +44 (0) 7970 778 952

 

Media

 Molly Neal      +44 (0) 7583 102 727

 Surinder Sian   +44 (0) 7812 485 153

 

CAUTIONARY STATEMENT

This announcement contains certain statements that are neither reported
financial results nor other historical information. These statements are
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. These statements include information with respect to
National Grid's (the Company) financial condition, its results of operations
and businesses, strategy, plans and objectives. Words such as 'aims',
'anticipates', 'expects', 'should', 'intends', 'plans', 'believes', 'outlook',
'seeks', 'estimates', 'targets', 'may', 'will', 'continue', 'project' and
similar expressions, as well as statements in the future tense, identify
forward-looking statements. These forward-looking statements are not
guarantees of National Grid's future performance and are subject to
assumptions, risks and uncertainties that could cause actual future results to
differ materially from those expressed in or implied by such forward-looking
statements. Many of these assumptions, risks and uncertainties relate to
factors that are beyond National Grid's ability to control, predict or
estimate precisely, such as changes in laws or regulations, including any
arising as a result of the United Kingdom's exit from the European Union,
announcements from and decisions by governmental bodies or regulators,
including the implementation of the RIIO-2 price controls; the timing of
construction and delivery by third parties of new generation projects
requiring connection; breaches of, or changes in, environmental, climate
change and health and safety laws or regulations, including breaches or other
incidents arising from the potentially harmful nature of its activities;
network failure or interruption (including any that result in safety and/or
environmental events), the inability to carry out critical non network
operations and damage to infrastructure, due to adverse weather conditions
including the impact of major storms as well as the results of climate change,
due to counterparties being unable to deliver physical commodities, or due to
the failure of or unauthorised access to or deliberate breaches of National
Grid's IT systems and supporting technology; failure to adequately forecast
and respond to disruptions in energy supply including those caused by the
COVID-19 pandemic; performance against regulatory targets and standards and
against National Grid's peers with the aim of delivering stakeholder
expectations regarding costs and efficiency savings, as well as against
targets and standards designed to deliver net zero; and customers and
counterparties (including financial institutions) failing to perform their
obligations to the Company. Other factors that could cause actual results to
differ materially from those described in this announcement include
fluctuations in exchange rates, interest rates and commodity price indices;
restrictions and conditions (including filing requirements) in National Grid's
borrowing and debt arrangements, funding costs and access to financing;
regulatory requirements for the Company to maintain financial resources in
certain parts of its business and restrictions on some subsidiaries'
transactions such as paying dividends, lending or levying charges; the delayed
timing of recoveries and payments in National Grid's regulated businesses,
including as a result of the COVID-19 pandemic, and whether aspects of its
activities are contestable; the funding requirements and performance of
National Grid's pension schemes and other post-retirement benefit schemes; the
failure to attract, develop and retain employees with the necessary
competencies, including leadership skills, and any significant disputes
arising with National Grid's employees or the breach of laws or regulations by
its employees; the failure to respond to market developments, including
competition for onshore transmission; the threats and opportunities presented
by emerging technology; the failure by the Company to respond to, or meet its
own commitments as a leader in relation to, climate change development
activities relating to energy transition, including the integration of
distributed energy resources; and the need to grow the Company's business to
deliver its strategy, as well as incorrect or unforeseen assumptions or
conclusions (including unanticipated costs and liabilities) relating to
business development activity, including the integration of WPD, the sale of
the Company's Rhode Island gas and electricity business and the proposed sale
of a majority stake in its UK gas transmission business. For further details
regarding these and other assumptions, risks and uncertainties that may impact
National Grid, please read the Strategic Report section and the 'Risk factors'
on pages 236 to 239 of National Grid's most recent Annual Report and Accounts,
as updated by National Grid's unaudited half-year financial information for
the six months ended 30 September 2021 published on 18 November 2021. In
addition, new factors emerge from time to time and National Grid cannot assess
the potential impact of any such factor on its activities or the extent to
which any factor, or combination of factors, may cause actual future results
to differ materially from those contained in any forward-looking statement.
Except as may be required by law or regulation, the Company undertakes no
obligation to update any of its forward-looking statements, which speak only
as of the date of this announcement.

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