National Grid PLC saw its shares trade nearly flat in early London trading, dipping just 0.1% to 1,285 pence, as the utility giant announced the completion of a major infrastructure upgrade in northern England.
Grid Enhancement Project Wraps Up
The company has finished upgrading over 90 kilometers of overhead power lines between its Harker substation near Carlisle and the Scottish border. The project included installing new high-capacity circuits and is scheduled to receive a 184-tonne transformer in March. Once operational, the new substations will utilize SF6-free gas-insulated switchgear, a move aimed at reducing greenhouse gas emissions. "This enhancement bolsters current grid reliability and paves the way for future clean energy integration," stated construction director Mark Brindley.
Regulatory Horizon and Market Pressures
Investor attention is firmly fixed on the upcoming decision from UK energy regulator Ofgem regarding the RIIO-3 price control framework, expected this month. This multi-year regime, set to run from April 2026 to March 2031, will dictate allowed revenues and incentives for electricity and gas network operators. National Grid has indicated it will formally respond to the settlement in early March following a 20-working-day review period.
The broader UK utility sector is navigating a complex environment marked by political uncertainty and fluctuating interest rates. Utility stocks often face pressure when bond yields rise, as their dividend appeal diminishes. UK 10-year gilt yields recently retreated to approximately 4.50% after a spike linked to political concerns.
Timing is critical, as the UK's push for renewable energy—evidenced by a recent government auction securing 6.2 GW of new renewable capacity—continues to strain grid infrastructure. Meanwhile, sector peers like SSE are subject to the same regulatory forces, meaning Ofgem's final RIIO-3 terms could impact the entire utilities landscape.
National Grid is scheduled to release its full-year 2025/26 financial results on May 14.
