National Grid(NGG) - 2022 Q4 - Annual Report

Financial Performance - Underlying EPS for 2021/22 was 37.0 pence, compared to 10.6 pence in 2020/21, reflecting a significant increase [23] - Return on Equity (ROE) for the group was reported at 20.21% for 2021/22, up from 12.0% in the previous year [23] - The company’s underlying operating profit has shown a growth of 29% from continuing operations [62] - National Grid's dividend policy aims for per share growth in line with inflation, with dividends having grown for over 20 years [77] - The full-year dividend proposed is 50.97 pence per share, an increase from 49.16 pence per share in the prior period [109] - The company has a strong track record of delivering asset growth, with 8.7% growth reported for 2021/22 [98] Environmental Commitment - The company aims to eliminate fossil fuels from its US gas and electric systems by 2050, proposing a hybrid approach with electric heat pumps [41] - National Grid is committed to delivering a clean energy future and has been involved as a principal partner for COP26 [30] - The company has committed to reducing its Greenhouse Gas emissions to net zero by 2050, collaborating with governments to meet carbon reduction targets [85] - National Grid aims to achieve net zero greenhouse gas emissions by 2050, with a commitment to reduce emissions in line with climate science approved by the UN's Science Based Targets initiative [184][191] - The company is working on a pilot project to replace sulphur hexafluoride (SF6) gas with a greener alternative, aiming to reduce SF6 emissions by 50% by 2030 [191] - The company aims to achieve a 50% reduction in SF6 emissions by 2030 and eliminate SF6 gas from its electricity assets by 2050 [192] - National Grid's carbon emissions have decreased by 65% across the Group compared to a 1990 baseline [148] Safety and Employee Engagement - Group safety performance improved, with lost time injuries per 100,000 hours worked decreasing to 0.10 in 2021/22 from 0.13 in 2020/21 [25] - Employee engagement rose to 81% in 2021/22, up from 77% in the previous year [25] - The company emphasizes strong stakeholder relationships, including with governments, suppliers, and economic regulators, to ensure efficient service delivery [76] - National Grid received a score of 100 on the Human Rights Campaign Foundation's 2022 Corporate Equality Index, being recognized as a top employer for LGBTQ equality [216] - The company strives for 50% diversity in all new talent programs by 2025 [216] - The company plans to achieve Gold accreditation with Investors in People by the end of RIIO-ED2, demonstrating exceptional employment practices [216] Infrastructure and Investment - The company operates 14,397 miles (23,165 kilometers) of gas pipelines in the US, an increase from 14,372 miles (23,125 kilometers) in 2020/21 [65] - The company owns and operates 100,000 miles (161,000 kilometers) of electricity distribution circuits, up from 141,081 miles (227,337 kilometers) in 2020/21 [66] - The company is working on a new interconnector to link with Denmark, enhancing its capacity for renewable energy trading [66] - The company forecasts capital investment of £30 - 35 billion between 2021/22 and 2025/26, driving asset growth of 6 - 8% CAGR [94] - Green capital expenditure for decarbonisation will account for approximately £24 billion of the total investment during the same period [107] - The company is pivoting towards electricity, with significant investments in high-voltage electric transmission infrastructure and hydrogen blending projects in the US [121] Renewable Energy Initiatives - The company has invested significantly in large-scale renewable energy projects in the US, including wind and solar [52] - National Grid Ventures completed the North Sea Link interconnector, which can provide enough clean electricity to power 1.4 million homes [151] - The North Sea Link interconnector, costing €1.6 billion, can power approximately 1.4 million homes and is expected to reduce the UK's carbon emissions by 23 million tonnes [207] - The company has 22 GW of renewables connected to its UK and US electricity transmission and distribution networks [211] - The company is developing a Cap and Floor regulatory regime to reduce radial connections limiting distribution for future interconnectors [213] Community and Social Responsibility - National Grid donated £1 million to support humanitarian efforts in Ukraine, distributed equally among the British Red Cross, the United Nations refugee agency, and UNICEF [180] - WPD announced a £500,000 fund to assist those in fuel poverty during the winter, part of a wider £1 million Community Matters Fund, benefiting approximately 29,000 people [180] - The Treasury announced up to £350 of government support for households to mitigate rising energy costs, including a £200 discount on electricity bills [177] Market and Regulatory Environment - The reporting currency for financial results is in sterling, with a weighted average exchange rate of $1.35 to £1 for 2021/22 [27] - Ofgem announced a 54% increase in the energy price cap in February 2022 due to rising wholesale energy prices [176] - The energy price index rose by 26% from February 2021 to February 2022, with natural gas and electricity prices increasing by 24% and 9%, respectively [178] - The company reported a 330% increase in European gas prices in 2021, significantly impacting affordability for customers [175] Innovation and Technology - The company launched the Digitalising Work Management initiative to improve efficiency across 50 Electricity Transmission operations sites [211] - The company signed an offshore partnership with RWE Renewables for the New York Bight seabed lease auction, involving collaboration among fifty personnel [216] - The Pathfinder solution was launched in the US to digitize and streamline field force work, improving efficiency in operations [216] - A digital copy of Great Britain's energy system is being created, allowing for accurate forecasts and commercial decision-making [215] - The company launched the AiDash satellite tech partnership at COP26 to enhance the green value of its sites [215]