Na­tional Grid backs £850m plan for Den­mark ca­ble link

The Daily Telegraph - Business - - Business - By Jil­lian Am­brose

NA­TIONAL Grid has given the green light to an £850m plan to build the world’s longest high-volt­age power ca­ble be­tween the UK and Den­mark.

The en­ergy giant’s long-awaited in­vest­ment de­ci­sion means the 460-mile Vik­ing Link project will be­gin im­port­ing Dan­ish elec­tric­ity from 2023, rather than 2022 as orig­i­nally planned.

Na­tional Grid boss John Pet­ti­grew said the project will help keep the com­pany on track to grow the value of its port­fo­lio of pipes and wires by be­tween 5pc and 7pc over the medium term.

It will be ca­pa­ble of pow­er­ing over a mil­lion homes and is ex­pected to earn Na­tional Grid £100m be­fore in­ter­est, tax, debt and amor­ti­sa­tion. The de­ci­sion emerged as Na­tional Grid re­vealed its prof­its for the first half of this year fell by 6pc to £1.3bn af­ter it was stung by US tax re­forms and costs of re­pair­ing storm-hit as­sets.

Na­tional Grid’s US prob­lems in­clude a spate of in­dus­trial dis­putes over fresh worker con­tracts, which has led to a £97m lock­out of 1,200 gas work­ers in the US state of Mas­sachusetts. Around 16 union branches have ac­cepted its health and pen­sion ben­e­fit changes but two branches are re­sist­ing the terms at a cost of £1m a day to Na­tional Grid.

Na­tional Grid will be able to pay its share of the Vik­ing Link project, which it is de­vel­op­ing along­side Dan­ish trans­mis­sion com­pany En­erginet, in part us­ing the funds from the sale of its stake in the Ca­dent gas net­work busi­ness. Its shares edged up 1.5p to 840p yes­ter­day.

En­ergy sup­plier SSE and Innogy are dis­cussing changes to the terms of a planned tie-up of their re­tail units in Bri­tain af­ter Ofgem pro­posed a price cap on en­ergy tar­iffs. SSE, whose deal with Innogy would cre­ate the UK’s sec­ond-largest re­tail power provider, said it was likely the deal would be de­layed be­yond the first quar­ter of 2019.

John Pet­ti­grew, the boss of Na­tional Grid, said the de­ci­sion to in­vest in the Dan­ish scheme will in­crease in­fra­struc­ture value

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