‘Electric or bust’ for National Grid as big deals point to green future
NATIONAL GRID, the firm that helps keep Britain’s lights on, has announced a flurry of multi-billion pound deals as it bets big on a greener future.
It will buy Britain’s largest electricity distribution business for £7.8bn and offload a big stake in the UK national gas transmission system.
The group, which manages the UK’s power infrastructure, said it will buy Western Power Distribution (WPD) from US energy giant PPL Corporation.
In a separate deal, National Grid will also sell its Rhode Island utility business, The Narragansett Electric Company, to PPL for £2.7bn.
National Grid said it will launch a process later this year to sell a majority stake in National
Grid Gas (NGG). The firm did not reveal the size of the stake it is likely to sell, or what it hopes to raise, but it is expected to run into billions of pounds.
The offloading of the gas network and investment in electricity will mark a significant shift in National Grid’s portfolio.
It means electricity assets will make up 70 per cent of its portfolio, compared with 60 per cent before the deals.
The increase will put National Grid on an electrification path along with the rest of the country as gas boilers are phased out and electric cars become the norm. Around 27 per cent of the UK’s energy needs will be met by electricity or renewables by 2035, compared with 23 per cent in 2018.
Hargreaves Lansdown analyst, Laura Hoy, said: “National Grid’s Western Power acquisition draws a line in the sand for the utility’s strategy moving forward – electric or bust.
“From a strategic standpoint, it makes sense as the world shifts away from fossil fuels usage.
“Not only are homes consuming more, but the boom in electric cars represents an opportunity for NG, and the WPD acquisition puts it one step closer to seizing it.”
John Pettigrew, CEO of National Grid, said: “These transactions will be transformational for our UK portfolio.
“The acquisition of WPD is a one-off opportunity to acquire a significant scale position in UK electricity distribution.”