National Grid Commits to Investing $35 Billion in New York & Massachusetts to Meet Decarbonization Goals and Build a Stronger, Cleaner Grid

Rhea-AI Summary

National Grid announced a $75 billion investment plan across its UK and US service territories over the next five years, with $35 billion dedicated to energy system improvements in Massachusetts and New York. This represents a 60% increase compared to the last five years. The investment aims to enhance grid reliability, reduce emissions, and meet decarbonization targets. In New York, $21 billion will be allocated to projects like the Upstate Upgrade, comprising over 70 transmission enhancement projects. In New England, $14 billion will be directed towards grid modernization and smart meters. The initiative is expected to support 127,000 jobs and significantly contribute to economic growth.

Positive

• National Grid plans a $75 billion investment across its UK and US service territories over the next five years, with $35 billion focused on the US.
• The investment in the US represents a 60% increase compared to the last five years.
• National Grid's investment in New York totals $21 billion, including more than 70 transmission enhancement projects.
• The Upstate Upgrade in New York will improve grid reliability and resilience, generating thousands of new jobs.
• In New England, $14 billion will be invested in grid modernization, including smart meters and infrastructure upgrades.
• The initiative is expected to support 127,000 jobs by the end of the decade.
• The effort aligns with state climate goals and aims to reduce greenhouse gas emissions.
• The Massachusetts Electric Sector Modernization Plan (ESMP) will accelerate the connection of renewables to the grid.

Negative

• The massive investment requires substantial capital, which could lead to increased financial risk.
• Potential delays or cost overruns in large-scale projects like the Upstate Upgrade could impact financial performance.
• The need for regulatory approvals and community support could pose hurdles, potentially delaying project timelines.
• The transition to modernized infrastructure may increase short-term operational expenses.
• There is a risk that the anticipated economic benefits and job creation might not fully materialize.

News Market Reaction

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Projects Across Northeast Will Harden Grid, Reduce Emissions and 
Deliver Benefits for Customers & Local Economies

BROOKLYN, N.Y. and WALTHAM, Mass., May 23, 2024 /PRNewswire/ -- National Grid today announced plans to invest an estimated $75 billion* across the company's service territory in the UK and US over the next five years, with nearly half of the funding dedicated to US energy system improvements in Massachusetts and New York. This significant step up to approximately $35 billion* of investment represents an increase of more than 60% on National Grid's investment in the region in the last five years. Today's announcement makes National Grid one of the biggest investors in the energy transition in the Northeast and demonstrates the company's commitment to help both states achieve their climate goals and deliver economic growth.

Group CEO of National Grid John Pettigrew said: "Today's announcement is a clear illustration that National Grid is committed to playing our part in achieving the ambitious decarbonization targets that New York and Massachusetts governments have set. The increased investment we're announcing today follows positive engagement with our regulators in these states, reflecting a willingness to upgrade electricity networks to provide long term affordable energy to all, and reduce emissions across our gas networks."

According to the US Department of Energy (DOE), lack of transmission infrastructure can directly contribute to higher electric bills, and more frequent and longer power outages. Preliminary findings from DOE's National Transmission Needs Study also found that developing new transmission in the New York-New England corridor would not only improve reliability, but also support the increasing electric demand in the region. The federal analysis found the region needs a 255% increase in transmission development to support the clean energy growth expected under New York and Massachusetts policies.

As a result of the investment announced today, National Grid will unlock economic growth across New York and Massachusetts. By the end of the decade, National Grid will support 127,000 jobs.

In New York, National Grid is investing around $21 billion* between now and 2029. Among those investments is the Upstate Upgrade which comprises more than 70 transmission enhancement projects across Upstate New York. The portfolio of projects will transform the grid, improve reliability and resilience, and enable National Grid to deliver renewable energy to homes and businesses across the state. This investment will also generate thousands of new jobs and create additional economic growth, all while ensuring the grid is able to meet the growing demand for electricity.

"This landmark investment will transform the energy grid to meet growing energy needs and is a much-needed piece of the puzzle to support the clean energy transition," said National Grid New York President Rudy Wynter. "The money we are spending to make these upgrades is necessary to deliver renewable energy to homes and businesses across New York."

In New England, our five-year investment will total roughly $14 billion*.  As part of this investment, National Grid will implement innovative solutions, like smart meters, to help consumers manage energy use; build modernized energy infrastructure; construct and upgrade infrastructure to make it less susceptible to extreme weather events; and maintain and improve the quality of our existing gas and transmission assets.

One such proposed project, the Massachusetts Electric Sector Modernization Plan (ESMP) would create a path to upgrade and expand the electric grid, accelerate the connection of renewables to the grid, and introduce new customer programs to encourage energy efficiency, and the adoption of clean energy. 

"National Grid is making it clear that we are a committed partner to help Massachusetts meet its climate and clean energy goals," said National Grid New England President Lisa Wieland. "The investment is essential to transform the energy ecosystem, build new and expanded infrastructure, and deliver an electric network that is fundamentally smarter, stronger, cleaner and more equitable than today."

In addition to the transmission investments, National Grid has proposed a three-year investment plan to modernize the Downstate gas businesses, reducing emissions, and making them more resilient and reliable. This includes a focus on disadvantaged communities and accelerating gas main replacements to reduce emissions, with a target of 45 miles/year of replacements in New York City and 119 miles/year on Long Island. Since 2013 National Grid has replaced 1,500 miles of gas main, lowering system emissions by 102,385 metric tons of CO2e, the equivalent to removing 22,257 cars from the road.

*Based on £1: $1.25 exchange rate

About National Grid

National Grid (NYSE: NGG) is an electricity, natural gas, and clean energy delivery company serving more than 20 million people through our networks in New York and Massachusetts. National Grid is focused on building a smarter, stronger, cleaner energy future — transforming our networks with more reliable and resilient energy solutions to meet state climate goals and reduce greenhouse gas emissions.

For more information, please visit our website, follow us on X (formerly Twitter), watch us on YouTube, like us on Facebook and find us on Instagram.

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SOURCE National Grid

FAQ

What is the total investment National Grid is planning?

National Grid is planning a total investment of $75 billion over the next five years.

How much is National Grid investing in New York?

National Grid is investing around $21 billion in New York.

What is the Upstate Upgrade project by National Grid?

The Upstate Upgrade is a portfolio of over 70 transmission enhancement projects aimed at improving grid reliability in New York.

How much will National Grid invest in New England?

National Grid will invest approximately $14 billion in New England.

What are the expected job creation numbers from National Grid's investment?

The investment is expected to support 127,000 jobs by the end of the decade.

How does National Grid's investment align with climate goals?

The investment aims to meet decarbonization targets and reduce greenhouse gas emissions in line with state climate goals.