Windfall tax could damage net zero push, warns National Grid CEO John Pettigrew
The boss of National Grid thinks the government should resist pressure to introduce a windfall tax on energy giants, warning a one-off levy could risk setting back net zero goals.
John Pettigrew said: “My concern would be that it would act as a deterrent to investment.
“At a macro level, I think it’s really important, as we look at the targets for net zero by 2050, that we have a stable investment environment.”
National Grid runs the UK’s energy infrastructure, transporting power from generators to homes. It would not be affected by a windfall tax, which would be levied on oil and gas giants that have benefited from soaring prices.
The government faces growing pressure to introduce the special tax to help fund support for families and businesses struggling with the cost of living crisis.
The prime minister has so far resisted pressure, arguing that a windfall tax would deter investment needed to ensure Britain’s energy security and transition to green power.
Pettigrew’s comments came as National Grid unveiled a rise in profits in a busy year that saw it pivot towards electricity and away from gas as it prepares for net zero.
National Grid bought electricity network Western Power Distribution for £7.9 billion and sold 60% of its gas business to Australian and Canadian investors for £4.2 billion. The deals have left National Grid with 70% of its business focused on electricity and 30% on gas.
Operating profits rose 11% to $3.9 billion in the 12 months to the end of March when stripping out the impact of various deals and other exceptional items. That was higher than City forecasts.
“When you stand back, underpinning the good performance is a record level of investment for National Grid this year,” Pettigrew said.
The company invested £6.7 billion in infrastructure projects and has pledged to invest up to £35 billion over the next five years.
“Our focus has been very much on security of supply and net zero,” Pettigrew said.
Laura Hoy, equity analyst at Hargreaves Lansdown, said: “National Grid’s planted itself firmly at the centre of the electric revolution with a portfolio that’s set to lean 70% to electrification.
“That’s offered a huge growth opportunity for the company as it looks to shore up the existing grid and expand capacity to allow for the influx of new connections.”
National Grid forecast flat earnings in the year ahead, which disappointed some analysts.
