REG - National Grid PLC - Ofgem - Sector Specific Methodology Consultation

National GridAnnouncement

13/12/2023 07:15

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RNS Number : 5630W  National Grid PLC  13 December 2023

 

13 December 2023

 

Ofgem publishes its Sector Specific Methodology Consultation

 

 

Ofgem has today published sector specific consultation documents for our UK
Electricity Transmission business relating to the RIIO-T3 regulatory period
which will be effective from April 2026 through to March 2031.

The consultation is the next phase of the RIIO-T3 process and provides the
framework on which we will base our Electricity Transmission business plan,
due for submission in late 2024. As we look towards RIIO-T3, and a further
step up in investment, we especially welcome Ofgem's recognition in this
consultation of the need to deliver clear signals and direction so as to
provide certainty and assurance to investors that projects are viable,
investable and deliverable. This will enable National Grid to continue
delivering world class networks at the lowest cost for consumers.

This consultation is part of a wider suite of changes required to keep the
energy transition moving at pace, and we are encouraged by the recent progress
from government and Ofgem on a number of fronts. We are now moving to deliver
our new contractual model for working with the supply chain. The procurement
process for our enterprise partnership model has been launched, and strategic
partners will be selected in the coming months to ensure we can deliver major
projects in the timeframes required.

Getting the right policies and regulatory framework in place will enable the
industry to keep driving forward and overcome barriers to reach a net zero
energy system as soon as possible. We look forward to providing a detailed
response to this sector specific consultation in the first quarter of 2024, as
a next step.

 

Enquiries and contacts

 

Investors and Analyst:

 

Nick Ashworth
                                    +44 (0)
7814 355 590

Angela Broad
                                     +44
(0) 7825 351 918

James Flanagan
+44 (0) 7970 778 952

 

Media:

 

Molly
Neal
+44 (0) 7583 102 727

 

 

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. This document also references climate-related
targets and climate-related risks which differ from conventional financial
risks in that they are complex, novel and tend to involve projection over
long-term scenarios which are subject to significant uncertainty and change.
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 or targets. 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 announcements from and decisions by
governmental bodies or regulators, including those relating to the RIIO-T2 and
RIIO-ED2 price controls and proposals for the future of the electricity system
operator in the United Kingdom; 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; 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, and
whether aspects of its activities are contestable; the funding requirements
and performance of National Grid's pension schemes and other postretirement
benefit schemes; the failure to attract, develop and retain employees with the
necessary competencies, including leadership and business capabilities, 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 its UK
Electricity Distribution business, the sale of its UK Gas Transmission
business, and the separation and transfer of the ESO to the public sector. 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 225 to 228 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 2023 published on
9 November 2023. 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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