Can you introduce us to National Grid and your vision since taking your current role in 2021?
National Grid is a prominent investor-owned utility, listed on the London Stock Exchange, with a business model we term “Networks Plus.” Predominantly, we are a network utility, overseeing transmission and distribution networks. Although our operations are diverse, 90% of our focus is directed toward networks, a composition that we believe aligns with the ongoing energy transition. We are balanced between the UK and the US, offering a comprehensive perspective on energy matters on both continents.
Our vision centers on facilitating a clean, fair, and affordable energy future. The energy transition and efficient delivery to our customers are pivotal. We play a central role, being the backbone of the energy transition. With a mix of 70% electric and 30% gas, we believe in gas’s enduring role, balancing reliability and sustainability. We anticipate substantial growth, requiring extensive asset expansion to accommodate the surge in electricity demand due to broad electrification trends and net zero ambitions.
Could you elaborate more on the infrastructure and footprint of National Grid?
In the UK, we manage the high-voltage transmission network for England and Wales, and distribution systems in specified regions. Our facilities include Europe’s largest LNG terminal and an extensive fleet of subsea electrical interconnectors, positioning us as global leaders in this realm. In the United States we are a regional entity, operating public utilities in New York and Massachusetts and a renewables business in the Midwest. We are also excited about our partnership with RWE to develop one of the world’s largest offshore wind farms in New York Bight.
Our infrastructure is significant, spanning across transmission and distribution in the electricity and gas sectors. In addition to our established assets, we are investing in innovative green tech companies through our corporate venture capital business National Grid Partners. These partnerships facilitate mutual growth and innovation, intertwining our traditional operations with cutting-edge technologies to enhance the sustainability and efficiency of our services.
What are National Grid’s concrete sustainability commitments?
Our commitment is to achieve real net zero by 2050, with interim goals aligned with the Science Based Targets Institute for 1.5-degree compliant emissions reductions across all business units. However, achieving these objectives is not solely within our purview. It is intrinsically linked to systemic decarbonization, requiring concerted efforts and partnerships. We advocate for essential changes, emphasizing transparency and progress reporting to instill confidence in our commitments and actions.
The symbiosis between speed and scalability is fundamental to actualizing our sustainability aspirations. As we navigate this journey, openness, advocacy, and partnerships underscore our approach. While aiming for net zero, we recognize the indispensability of collective efforts to surmount inherent challenges and external dependencies, weaving a tapestry of shared responsibility and mutual progress towards a sustainable future.
What challenges do you foresee in the energy sector, and how is National Grid addressing them?
A key challenge is planning and permitting. Streamlining these processes while respecting democratic principles and community investments is essential. We are advocating for accelerated planning processes in the UK, with encouraging support from the government and opposition. Regulation is another focus area. The regulatory frameworks, originally designed to restrain overbuilding amongst regulated monopolies, need to evolve to facilitate the immense growth precipitated by the energy transition.
Our public documents, "Delivering for 2035" in the UK and the "Electricity Sector Modernization Plan" in Massachusetts, outline our perspective and proposals to surmount these hurdles. The shift towards a forward-looking regulatory approach is vital. While networks constitute a relatively small part of the customer bill, their role is foundational.
Balancing capacity expansion with the pace of change is crucial to ensuring that networks are not the bottleneck but the enabler of the energy transition, ensuring reliability, affordability, and sustainability for all stakeholders.
What needs to change in the planning and permitting process to accelerate the development of the energy sector?
One pivotal change is the introduction of strategic spatial plans for the development of the energy sector, a concept we are discussing in the UK. These plans, endorsed by the government and consulted upon for democratic legitimacy, will offer forward-looking insights into future generation sources, strategic demand sources, and the required network infrastructure. A spatial plan, with its detailed portrayal of asset locations, will provide clarity and assurance to the public about the thoughtful planning behind infrastructure development.
The conversation will then shift towards mitigation and compensation, aiming for minimal impact and maximized benefit for communities hosting the infrastructure. Addressing the supply chain and skills gap is also crucial. By fostering a well-planned build-out, we can create jobs and stimulate economic growth in communities hosting new energy infrastructure, ensuring enduring economic benefits and not just temporary gains during the project’s lifespan.
How do you address concerns about the visual and environmental impact of transmission lines, and what are the strategies to mitigate these issues?
Our approach is rooted in respect and collaboration with communities. The first step is to demonstrate that the needs case is well thought through and that the proposed infrastructure is optimized to minimize impact. Through rounds of consultation, we refine the route, explore undergrounding options, and consider the removal of other assets to reduce the net impact. It is crucial that communities are introduced to plans that are already optimized to minimize adverse effects.
Undergrounding, though a potential alternative to overhead lines in some circumstances, is expensive and not without its impacts. It requires clearing a significant area and leaves a sterilized strip that cannot be built upon. For long-distance connections, offshore links and direct current (DC) options, involving complex converter stations, become viable. Navigating these complexities requires a blend of technology and community engagement to ensure the most beneficial outcomes for all stakeholders.
What final message would you like to convey to the audience and policymakers at COP 28 regarding the energy transition?
The energy transition has reached a tipping point where the energy trilemma is being overcome. Renewables are driving us towards not just a cleaner energy future, but also one that is more affordable and secure. The domestic nature of renewable generation sources like wind and solar enhances energy security by reducing dependence on imported fuels. So, the shift towards clean energy aligns with economic and security interests as well.
Embracing renewables transcends climate priorities; it is a sensible choice for economic and security reasons. Countries and communities stand to benefit from lower energy costs and enhanced security of supply, in addition to the environmental advantages. As we communicate and collaborate on the global stage, it is essential to recognize the multifaceted benefits of accelerating the energy transition, and urging collective action for a sustainable, secure, and prosperous future for all.
