Real operational returns in the UK continued to be above the level allowed by the regulator, although electricity transmission had dropped from 6.4 per cent the previous year to 5.6 per cent. Gas transmission returns stood at 7.3 per cent. Transmission operating profit stood at £1.35bn compared to £1.36bn in 2011.
Gas distribution returns were up 7 per cent by £52 million to £763 million. Executive director Nick Winser told Utility Week that the firm had “no intention” of selling any of its four distribition businesses. The company said 2012/13 would be another good year for its gas distribution business with efficiency programmes beginning to take effect.
Operating profit was up 30 per cent to £86 million at the Grain liquified natural gas storage operation thanks to extra capacity coming on stream at the end of 2010.
While shale gas has had a major impact on the energy industry in the USA, Winser said National Grid did not expect shale to to have a major impact in Europe this decade, “if ever”.
He added that the firm “needs to see the regulation” before making a decision on setting up a standalone carbon capture and storage (CCS) unit.
As for electricity market reform, where National Grid will take a central administrative role in both the contracts for difference (CFD) and the capacity element, Winser said there was “a lot of discussion to go”.
“The development of the CFD and capacity mechanism is still underway… and decisions have yet to be made… as to who will be the counterparty,” said Winser. “Our role will be to administer this. It has no financial impact on us.”