The company says the cash will allow it to fund a significant increase in UK capital investment, much of which is driven by the need to connect new wind generation.
National Grid estimates that £5.6 billion needs to be invested in UK networks over the next five years; £3.6 billion of this is for urgent reinforcement of the system to meet the country’s low carbon energy targets.
The Electricity Networks Strategy Group (ENSG), a high-level forum chaired by the government and regulator, has identified £4.7 billion of transmission reinforcements needed for new generation and to meet the government’s 2020 15% renewable energy target.
According to ENSG, 36% of electricity will need to come from renewables to meet this target, including 32GW of wind - 13GW onshore and 19GW offshore. National Grid has already begun preliminary work on investment in new system upgrades to enable early connection of new renewables.
A further slice of National Grid’s planned investment over the next five years is earmarked for operating new offshore connections for wind farms at sea.
The company will be competing against other potential offshore transmission owners (OFTOs) to design, build and operate the offshore transmission assets under the UK’s new offshore transmission regime.