So reading Labour’s criticisms of National Grid and their proposals for state ownership resonated with me personally, both because I know the unfairness of their criticisms of us but also because I can see what is wrong with their proposals.
You won’t be surprised to hear that state ownership is a common topic I’ve been asked about a lot lately, in particular, what we are doing to change the minds of the Labour leadership. It’s quite a straight forward answer really, in that we continue to engage and work with the Labour party to understand what it is they want to deliver. It’s important that we do this as we both have the same goal in wanting a cleaner greener energy future that’s fair for all consumers across Great Britain, and at the lowest cost to billpayers.
At National Grid we believe we’re well on our way to delivering this. Only a few days ago, we broke the record for the longest period of time our country was coal free, and at the time of writing, we’ve had another record set for solar generation. In April, the Electricity System Operator announced that it will be able to fully operate the electricity system with zero carbon by 2025.
Under the current system National Grid is already delivering a greener energy network at low cost to billpayers. We know that affordability of the infrastructure we provide is extremely important to consumers. We provide world-class levels of reliability for just three per cent of an average energy bill, that’s less than 10 pence a day.
We have invested more than £10 billion in UK electricity and gas networks over the last six years and will continue to invest around £1.3 billion each year in the UK. In addition, we have generated almost £640 million of savings for consumers through our regulatory arrangements in the last six years.
We’re also investing £2.1 billion in four new electricity interconnectors to Europe. By 2025, these new interconnectors, along with those already in operation, will be importing 90 per cent clean energy and will carry enough electricity to power eight million homes in the UK.
Our employees are working hard to enable the switch to electric vehicles (EV). We have identified 54 sites across UK motorway service stations where an upgraded network connection would allow 99 per cent of drivers to be within a 50-mile radius of an ultra-rapid charging station. This is something we feel passionately about. Upgrades to existing infrastructure could drive the growth of EV take up. In our research and conversations, we’re hearing that people are put off in buying an EV because they worry about “range anxiety” – running out of power and unsure of where the next charging station is. We’re finding solutions to these problems, but most importantly, finding solutions that will benefit everyone and ensure no one is left behind.
The proposals put forward by Labour look complex and costly and introducing a system of this nature will inevitably take a considerable amount of time. This risks causing delay and confusion just at the moment when energy networks are in the middle of a transformation to a new, green energy system. And it’s also not clear how this will be paid for. Paying below fair value would hit those who have invested in our company, which include local authority pension funds, our own employees as well as numerous private UK pensions through UK funds.
Never has the environment been so much at the forefront of global consciousness. To go down the route that Labour are proposing risks destabilising the investment and innovation that has been gathering pace in recent years. When I talk to overseas investors now, they tell me that the UK is not as attractive to invest as it once was – they’re not just questioning investment in UK utilities but UK equities as a whole. This saddens me, especially when I can see the potential Great Britain has in being a world leader on decarbonisation and climate change.
David Smith, chief executive of the Energy Networks Association has also shared his view on Labour’s proposals. Read his piece for Utility Week here.