Money no object for Net Zero fantasists

The small problem with National Grid’s Net Zero investment plan is that they can’t afford it.

National Grid has just announced a new expenditure programme, worth £60 billion, covering new transmission infrastructure, both onshore and offshore. The spend is to be completed by 2035, and we are told that it will add around £20 to a household bill. This is strictly true, but ignores the rather important detail that it will add a similar amount to the general cost of living too, so they should have said the cost to a homeowner is around £40 per year.

Worse, the new programme comes on top of another £54 billion announced in 2022, so consumers are actually going to be coughing up something more like £80 extra per year. And that’s only if National Grid delivers the projects to budget. The history here is not encouraging, so we might realistically expect to have to pay something more like an extra £150 per year.

And bear in mind that this is only for expansion of the 20,000 kilometers of the transmission grid. The distribution grid, which currently has 800,000 kilometers of cables, most of which will need to be replaced, is extra.*

But there’s another problem, namely the small detail that National Grid Electricity Transmission can’t actually afford to borrow this kind of money. It already has £10 billion of debt, with equity at just £4.5 billion, so it is pretty highly leveraged already. Lenders might tolerate another £5 billion, but £120 billion – I don’t think so!

So is the plan to nationalise the transmission network, and get the taxpayer to stump up the cash? This seems pretty implausible too. The state would need to find the £15 billion to buy out the shareholders, and then find the £120 billion needed to expand the network! They simply don’t have that kind of money any longer.

It’s all fantasy policy, with green zealots in Whitehall demanding the impossible of the people actually charged with delivering things on the ground. We need some realists in Westminster, and soon, before any more damage is done.

*Source for grid sizes: BEIS.