Revamp to National Grid Will Increase Homeowners’ Energy Bills

The National Grid has just released information about a new investment in a greener energy infrastructure that will cost the average UK household an extra £4 a year on energy bills. This group, which runs Britain’s electricity and gas networks, announced it would ask investors for £3.2 billion in a rights issue next month as it steps up spending to £22 billion over the next five years. This is an increase from £14 billion in the past five years. Three quarters of the total money will be spent in the UK.

The shares for five rights issues is heavily discounted at 335p and took the city by shock. Finance director, Steve Lucas, explained that the company needed more equity to maintain its stable credit rating in light of the ramped up capital spending.

Mr Lucas went on to say that this is a very major investment for the company. The company has worked out the costs, which will be passed on to its clients, the energy companies, and ultimately to households. Thus, the average household will see their average energy bill increase just £4 per average customer a year. Overall, that is a pretty good deal.

This move comes just as the new government set out the full details of its coalition agreement. The government wants to increase the 15 percent target for energy from renewable sources, subject to advice from the climate change committee. The government also hopes to roll out a new smart meter scheme to boost the number of homes with the energy saving devices, which will be supported by the creation of a smart grid.

Also, a full feed in tariff system is planned to encourage renewable energy. The creation of a green investment bank was also confirmed.