REG - National Grid PLC - Upgraded 5-year framework and RIIO-T3 acceptance

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RNS Number : 8830U  National Grid PLC  02 March 2026

 

02 March 2026

National Grid plc

Extended and upgraded 5-year Financial Framework and acceptance of RIIO-T3

 

National Grid today announces an extended and upgraded 5-year Financial
Framework 1  (#_ftn1) to FY31, further underpinning our attractive investor
proposition of growth and yield, with:

·    Cumulative capital investment of at least £70 billion;

·    Group asset growth CAGR of around 10%;

·    Upgraded underlying earnings per share CAGR of 8-10% from an FY26
baseline, more aligned with our asset growth;

·    A strong balance sheet, with credit metrics consistent with current
Group rating; and

·    Aim to grow the dividend per share in line with UK CPIH.

We are also announcing our acceptance of the RIIO-T3 regulatory framework for
our UK Electricity Transmission Business, which along with constructive recent
US regulatory outcomes and our progress in securing supply chain creates
improved visibility and momentum across the Group over the next five years to
FY31.

Zoë Yujnovich, Chief Executive said: "Today marks a further step in
accelerating investment in Britain and the US Northeast at a time when modern,
resilient networks are fundamental to economic growth. Building on National
Grid's strong track record of delivery, we are expanding our record levels of
investment to at least £70 billion by FY31, driving around 10% asset growth
and an upgraded underlying EPS CAGR of between 8 and 10%. Our focus is clear:
disciplined execution, at scale, supported by regulatory frameworks that
recognise the critical role of networks. We are delivering infrastructure that
will ensure reliable, cleaner and increasingly affordable energy - for
customers, communities and long‑term investors alike."

National Grid's new 5-year Financial Framework to FY31 is supported by
multiple investment drivers from decarbonisation and energy security to
accelerating demand growth from data centres and the rise of AI, alongside the
electrification of industrial demand. This, together with our robust delivery
plans and strong balance sheet allows us to extend and upgrade our financial
framework.

Our investment plan represents a 70% increase relative to the prior 5 years
reflecting a doubling of investment into UK electricity networks, and an
almost 50% increase in investment into our US gas and electricity networks.
Our efficient delivery is connecting more new generation and demand load
faster than ever before, enabling economic growth, bolstering energy security
and supporting clean, affordable energy for our communities and customers on
both sides of the Atlantic.

The expected split of the at least £70 billion of capital investment across
the Group is:

·    UK Electricity Transmission                c.£31
billion

·    UK Electricity Distribution                  c.£9
billion

·    New York Regulated
c.£17 billion

·    New England Regulated                     c.£12
billion

·    National Grid Ventures
c.£1 billion

As a result, we expect Group assets to reach around £115 billion by FY31,
subject to ongoing cycles of regulatory approval, customer demand and similar
factors. Our balance sheet strength combined with higher earnings growth will
allow us to execute this step up in investment and deliver attractive levels
of long-term growth for shareholders. This balance sheet strength extends
beyond FY31, complemented by significant hybrid capacity.

For FY26, the Group's performance remains in line with our expectations and
for FY27 we now expect underlying EPS growth of 13-15%, reflecting higher
allowed revenue as we step up delivery from RIIO-T2 to RIIO-T3.

RIIO-T3 price control accepted

National Grid today also confirms that it has accepted all of the RIIO-T3
price control arrangements proposed by Ofgem in its Final Determination, which
covers our UK Electricity Transmission business for the period April 2026 to
March 2031.

We have engaged in detail with Ofgem on its Final Determination for the
RIIO-T3 price control, which was published on 4 December 2025. We have made
positive progress working with Ofgem in ensuring the new licence provides
clarity on the design of the incentives package and improvements to the
workability of the framework that will enable transmission owners to recover
the efficient cost of their investments whilst progressing projects at the
pace expected by our stakeholders.

As a result, Ofgem's Final Determination delivers a price control that enables
networks to invest at the pace and scale needed to meet the ramp up in power
demand, with plans to nearly double the amount of power that can flow across
the country, avoiding constraint costs and ensuring a resilient, clean,
future-proofed network that will be critical to underpinning economic
competitiveness and growth for Britain in the years ahead.

RIIO-T3 performance

UK Electricity Transmission has a strong track record of performance and
expects to continue to deliver strong operational and financing performance
over the RIIO-T3 period. We are confident that this price control enables
delivery of an overall return on equity above 9% across the price control.

We expect that operational performance will be delivered through totex
efficiencies and performance against Output Delivery Incentives (ODI), with
the timing of ODI incentive recognition unevenly phased across the price
control period. Together these incentives will deliver significant value to
consumers including through innovation in our working methods, timely delivery
of major projects as we deliver these later in the RIIO-T3 period, and
optimising our project plans to minimise constraint costs, whilst achieving
globally competitive overall returns.

 1  (#_ftnref1) Guidance based on an assumed USD FX rate of $1.35:£1;
long-run UK CPIH and US CPI and interest rate assumptions; and scrip uptake of
25%.

Analyst call with Q&A

Zoë Yujnovich, CEO and Andy Agg, CFO will host an analyst call today at 9:30
GMT.  To register for the webcast please use this link:
https://stream.brrmedia.co.uk/broadcast/698d7f24f12443001290ffba
(https://stream.brrmedia.co.uk/broadcast/698d7f24f12443001290ffba) . To view
the slides and listen to the audio please use this link:
https://www.nationalgrid.com/investors/events/events-and-materials-centre
(https://www.nationalgrid.com/investors/events/events-and-materials-centre) .

If you would like to ask a question:

 UK-Wide:                 +44 (0) 33 0551 0200
 UK Toll Free:            0808 109 0700
 USA Local:               +1 786 697 3501
 Password (if prompted):  Quote 'National Grid Webcast' when prompted by the operator

 

Inside Information

This announcement is being disclosed in accordance with the UK Market Abuse
Regulation and has been determined to contain inside information in line with
the definition therein.

 

 

Enquiries and contacts

Investors and Analysts

 Angela Broad  +44 (0) 7825 351 918
 Tom Edwards   +44 (0) 7976 962 791
 Cerys Reece   +44 (0) 7860 382 264

Media

 Miranda Cochrane        +44 (0) 7745 122 714
 Dan Roberts, Brunswick  +44 (0) 7980 959 590

 

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 and targets 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 and targets. Many
of these assumptions, risks and uncertainties relate to factors that are
beyond National Grid's ability to control or estimate precisely, such as
changes in laws or regulations and decisions by governmental bodies or
regulators, including those relating to current and upcoming price controls in
the UK and rate cases in the US; 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,
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; reliability of and access to IT
systems, including due to the failure of or unauthorised access to or
deliberate breaches of National Grid's 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 support its role in the energy transition; 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 post-retirement
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 breaches 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 sale of certain of
its businesses, its strategic infrastructure projects and joint ventures. For
further details regarding these and other assumptions, risks and uncertainties
that may affect National Grid, please read the Strategic Report section and
the 'Risk factors' on pages 262 to 268 of National Grid's Annual Report and
Accounts for the year ended 31 March 2025 as updated by the principal risks
and uncertainties statement on page 44 of the Company's half year results
statement, published on 6 November 2025. 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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