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National Grid pivots to electricity in mega shake-up

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LONDON: National Grid, which distributes energy to British homes and businesses, announced Thursday a multi-billion-pound shake-up of its electricity and gas assets as the UK transitions to cleaner fuels.


The company has agreed to buy Britain’s largest electricity distribution business — Western Power Distribution — from US energy giant PPL Corporation for £7.8 billion ($10.9 billion).


In a separate transaction, National Grid will sell its Rhode Island utility business — The Narragansett Electric Company — to PPL for $3.8 billion (3.2 billion euros).


National Grid also plans to sell a majority stake in National Grid Gas, it added in a statement.


“Together these transactions will strategically pivot National Grid’s UK portfolio towards electricity,” it said.


The proportion of the group’s assets in electricity will increase to around 70 per cent from 60 per cent.


“Our vision for National Grid remains unchanged, to be at the heart of a clean, fair and affordable energy future,” the company’s chief executive John Pettigrew said in the statement.


“With increased exposure to the UK’s electricity sector, these transactions enhance our role in the progress towards net zero, underpinning our core ambition which is to enable the energy transition for all.”


London-listed National grid, which took over the English and Welsh power networks in 1990, also said on Thursday it would sell Rhode Island utility the Narragansett Electric Company (NECO) to PPL for $3.8 billion.


The two companies said the deal for WPD, which runs the power distribution networks for England’s midlands and southwest, as well as Wales, had an enterprise value of £14.4 billion, which includes £6.6 billion of debt.


Shares in National grid were down 3 per cent to £8.10, among the biggest losers on the UK blue-chip index, at 0814 GMT.


National grid, which supplies gas and electricity to millions of customers, said the two deals would increase the proportion of its assets in electricity to 70 per cent from 60 per cent.


“When we look at the long term, we believe that the pivot that we are making today will enable us to take a much bigger role in the current energy transition,” National grid Chief Executive John Pettigrew told a news briefing.


WPD’s four distribution network operators (DNOs) deliver electricity to about 7.9 million customers and employ more than 6,500 staff. National grid said it would maintain the WPD headquarters in the western English city of Bristol.


Western Power Distribution (WPD) is Britain’s biggest single power network operator but under the country’s partially competitive market, it does not sell directly to end-users. — Reuters


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