Inquired about ED operational RoRE performance against the 50 basis points guide and the pathway to 100 basis points. Also asked for thoughts on the RIIO-ED3 sector-specific methodology consultation (SSMC) and any surprises.

John Pettigrew confirmed ED is on track for 50 basis points outperformance this year and expects to reach 100 basis points by the end of ED2. He noted the RIIO-ED3 SSMC was broad, aligned with expectations, and welcomed its long-term strategic view and focus on investment staying ahead of customer needs. “I think we were particularly pleased to see that Ofgem is set out that they intend to take a very long-term strategic view of distribution going forward over multiple price control periods and that ED3 will be set in that context.”

Asked if past Ofgem price controls provided sufficient allowances for maintenance and what the UK needs to do to efficiently deliver large-scale CapEx across all sectors.

John Pettigrew stated that past allowances were sufficient, evidenced by world-class reliability and a 50% reduction in unplanned outages over 10 years. For broader UK infrastructure, he emphasized stable fiscal/regulatory frameworks and further planning regime streamlining for efficient and rapid CapEx delivery. “I think we still like to see more done around the planning regime in the U.K. The planning legislation is going through, and I think that will streamline the process.”

Asked about the impact of a Select Committee discussion on "network windfalls" on Ofgem's view and for color on the expected clarity from NESO's new connection regime on the GBP 35 billion RIIO-T3 totex.

John Pettigrew clarified that National Grid has not received windfall profits, and Ofgem has already concluded against reopening the issue. He explained that the GBP 35 billion T3 totex is dependent on connection speed, and NESO's new regime will provide clarity on specific connections and substations over the next year, with offers rolling out from January. “What we're expecting to see over the next period is new connection offers will go out to those customers that are clusters protected, which means they've got planning consent and have started construction for connections in '27, '28, in January next year.”

NGG

National Grid (NGG) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Sep 2025 (Q2 FY26)· Utilities· Nov 6, 2025

Source: earnings call transcript

Executive summary

National Grid Q2 FY26 — Strong Half-Year Performance Driven by Network Investments and Regulatory Support

National Grid delivered strong half-year results, driven by increased regulatory revenues and record capital investments across its UK and US networks, underpinning its GBP 60 billion investment plan. The company is navigating a CEO transition while focusing on operational excellence, capital discipline, and securing supply chains for major projects like ASTI. Regulatory and policy support for infrastructure development, particularly for data centers and AI, is a key tailwind, though rising net debt and US gas availability remain areas of focus.

Highlights

Underlying operating profit increased by 13% to GBP 2.3 billion.
Underlying earnings per share rose by 6% to 29.8p.
Record capital investment of GBP 5.1 billion in H1, up 12% year-over-year.
Achieved over GBP 100 million in synergy savings from UK Electricity Distribution acquisition 6 months ahead of target.
Over 75% of the US 5-year investment plan has been approved within rate cases.

Concerns

Net debt increased by GBP 1.5 billion to GBP 41.8 billion in the period.
Gas availability across the coldest days of winter remains a focus in the US, especially in extreme weather events.
UK Electricity Distribution operating profit was down GBP 22 million due to headwinds from Ofgem's real price effect mechanism.

Guidance & targets

Category	Target	Timeline	Confidence
Annual Investment Growth	around 10% per annum high materiality	Annual	High
Underlying EPS Growth Rate	6% to 8% high materiality	Long-term	High
Full-Year Capital Investment	over GBP 11 billion high materiality	FY26	High
Full-Year Net Debt Increase	around GBP 1 billion medium materiality	FY26	High
Full-Year Underlying EPS	modestly higher high materiality	FY26	High
Interim Dividend per Share	16.35p medium materiality	Q2 · FY26	High
ED2 Operational RoRE Outperformance	closer to the 100 basis points medium materiality	End of ED2	High
5-Year Financial Framework	reaffirmed high materiality	through to FY29	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
U.K. Electricity Distribution Underlying operating profit was down GBP 22 million versus the prior year, reflecting lower revenues due to headwinds from Ofgem's real price effect mechanism, which more than offset the benefit of revenue indexation and recovery of higher totex allowances and higher depreciation. Capital investment: GBP 756 millionCapital investment growth: 17%Synergy savings: over GBP 100 million (cumulative)Synergy target achievement: 6 months ahead of schedule	—	—	—	GBP 551 million
U.K. Electricity Transmission Underlying operating profit was up GBP 122 million compared with the prior period, driven by higher allowed revenues partially offset by higher depreciation. This reflects ongoing spend on substation build-out as well as significant step-up in investments on ASTI projects and enabling works. Capital investment: GBP 1.7 billionCapital investment growth: 31%	—	—	—	GBP 846 million
New York (U.S.) Underlying operating profit was GBP 167 million higher than the prior year as a result of higher net revenue reflecting the growth of the business and recovery of previously unremunerated costs following recent rate case updates, partially offset by increased depreciation and higher costs. Capital investment: GBP 1.6 billionCapital investment growth: 5%	—	—	—	GBP 443 million
New England (U.S.) Underlying operating profit was GBP 65 million higher than the prior period, following higher revenues reflecting a growing asset base and improved incentive performance, partly offset by higher depreciation and other investment-related costs as the capital program ramps up. Capital investment: GBP 958 millionCapital investment growth: 23%	—	—	—	GBP 292 million
National Grid Ventures The underlying contribution increased by GBP 19 million compared to the prior year, primarily due to the benefit of depreciation having ceased in Grain LNG following its classification as held-for-sale. Capital investment reduced due to this accounting treatment and the sale of National Grid Renewables. Capital investment: GBP 69 millionInterconnector fleet availability: 90%Generation fleet reliability: 96%	—	—	—	GBP 227 million

Orderbook & backlog

UK Data Center Demand Pipeline 19 gigawatts RIIO-T3 plan

Expected additional demand over 5 years to March 2031; around half is expected to be connecting data centers.

New Substation in Uxbridge Moor Capacity 1.8 gigawatts H1 FY26

New capacity equivalent to powering a mid-sized city; will support over a dozen new data centers.

Deals & partnerships

null Sale of National Renewables business

Completed in May, streamlining the portfolio.

null Sale of Grain LNG business

Announced in August, all regulatory approvals received, expected to complete soon.

7 strategic partners Delivery of 8 onshore Wave 2 ASTI projects GBP 9 billion

The Great Grid Partnership covers the delivery of onshore projects within Wave 2 of ASTI.

7 regional partners Delivery of substation infrastructure across the UK transmission network GBP 8 billion

Signed in July, leveraging procurement frameworks for substation infrastructure.

Transco joint venture Development of Propel transmission project

EPC contracts are now under development for the project.

partners Strategic procurement framework for New England over $3 billion over the next 5 years

Agreed partners for a strategic procurement framework to support contracts over the next 5 years.

Capital programs

GBP 60 billion Capital Investment Plan underway GBP 60 billion

Period spend: GBP 5.1 billion

Benefit:future-proofing networks, meeting surge in demand, reliable and clean energy

Over three-quarters of the plan is underpinned by delivery mechanisms. Company is 18 months into the 5-year plan.

Accelerated Strategic Transmission Investment (ASTI) Wave 1 Projects under construction

All 6 Wave 1 projects are under construction. Examples include offshore EGL 1 and 2 (cable manufacturing, site works), Yorkshire Green upgrade (transformers delivered), and North London Reinforcement (reconducting circuits).

Great Grid Partnership (ASTI Wave 2 Onshore) up and running GBP 9 billion

Benefit:delivery of 8 onshore projects

Partnership with 7 strategic partners for Wave 2 onshore projects.

ASTI Wave 2 Offshore Projects contracting nearing completion

Contracting for Sea Link completed, preferred suppliers for Eagle 3 and 4 announced, contracts expected in next few months.

London Power Tunnels Project under construction GBP 1 billion

Benefit:energized first 2.5 kilometers during Hurst substation and Crayford

Progress on the project, including energizing a section.

New York Upstate Upgrade (Smart Path Connect) on track $4 billion

Includes Smart Path Connect transmission project, with segment on track to be ready to energize.

New York CLCPA Phase 1 and 2 Projects progressing

Expects the first round of permit approvals for the end of the calendar year.

Risks & headwinds

Gas availability in US winter

a focus

Mitigation:Teams will work closely with upstream suppliers to mitigate any risks.

Ofgem's Real Price Effect Mechanism H1 FY26

lower revenues

Mitigation:Offset by revenue indexation and recovery of higher totex allowances.

Higher Finance Costs H1 FY26

GBP 678 million

Weaker US Dollar FY26

small headwind

Mitigation:Expected to be more than offset by improved operating performance and lower financing costs.

Higher Scrip Uptake FY26

element of EPS dilution

Mitigation:Expected to be more than offset by improved operating performance and lower financing costs.

Regulatory Decisions on RIIO-T3 Final determination expected early December, decision late February/early March

changes we believe are needed to the baseline return and the incentive framework

Mitigation:Engaging heavily with Ofgem at all levels.

Project Delay Event (EGL 1) final decision over the next few months

null

Mitigation:Engaging with Ofgem, encouraged by discussions to date.

Affordability Debate (US & UK) Ongoing

significant issue

Mitigation:Engaging with stakeholders, setting aside funds for vulnerable customers ($290M in NIMO), driving efficiency through innovation, delivering infrastructure to relieve constraint costs (UK).

What to watch in Q3 FY26

RIIO-T3 Final Determination

Early December

Current Draft determination published, company response submitted.

Target Ofgem's final determination.

Why it matters

Will determine the overall investable framework, baseline return, and incentive structure for UK Electricity Transmission, impacting future earnings and investment.

As you'd expect, we've engaged heavily with Ofgem at all levels of the organization ahead of the final determination, which is expected in early December.

Find out whether NGG delivers this. Inve re-checks your case every morning.

Q&A highlights

Asked for color on Ofgem dialogue regarding T3, especially in light of UK water CMA decisions and Sizewell, and whether there's upward pressure on ROE. Also asked for drivers of improved full-year net debt guidance and its persistence.

John Pettigrew stated that National Grid argued for a globally comparable overall return and improved workability of the regulatory framework for T3, reinforced by water CMA and Sizewell decisions. Andy Agg clarified that the improved net debt guidance is due to disposals, FX, slightly higher scrip uptake, and a small working capital effect, not a significant enduring shift.

“I think given what we've seen in the provisional CMA decision on water and things like Sizewell, I think that reinforces some of the arguments that we've made.”

asked by Pavan Mahbubani · answered by John Pettigrew

2 min read 6 chapters

Detailed narrative

CEO Transition and Strategic Vision

John Pettigrew is stepping down, with Zoe Yujnovich taking over as CEO on November 17. Yujnovich emphasized maintaining momentum, focusing on performance, and delivering safely and responsibly, with a clear-eyed view of challenges and opportunities. She highlighted the GBP 60 billion capital investment as a commitment to future-proofing networks and meeting surging demand for reliable, clean, and affordable energy.

Supply Chain Securitization for Major Projects

National Grid has made significant progress in securing its supply chain for the Accelerated Strategic Transmission Investment (ASTI) projects. All 6 Wave 1 projects are under construction, and the GBP 9 billion Great Grid Partnership for 8 onshore Wave 2 projects is operational.

Contracting for the remaining 3 offshore Wave 2 projects is nearing completion, with over three-quarters of the GBP 60 billion investment plan now underpinned by delivery mechanisms.

Regulatory and Policy Momentum

The company is seeing continued regulatory and policy support for its investments. In the U.S., 75% of the 5-year investment plan is approved, and New York State is shifting towards an "all-of-the-above" energy approach, supporting projects like the NESE pipeline for reliability and cost reduction. In the U.K., planning reforms and fast-track consenting processes are being explored to accelerate infrastructure delivery.

Addressing Load Growth, Especially Data Centers

National Grid is actively working with the government and tech companies to support the development of AI infrastructure and data centers in the U.K., particularly in AI growth zones. The RIIO-T3 business plan is designed to connect up to 19 gigawatts of additional demand by March 2031, with approximately half of this expected from data centers, necessitating significant network investment.

RIIO-T3 and RIIO-ED3 Regulatory Engagements

The company is actively engaging with Ofgem on the RIIO-T3 framework, advocating for a globally competitive overall return and streamlined funding mechanisms to recover investment costs and accelerate project delivery. For RIIO-ED3, Ofgem's sector-specific methodology consultation is welcomed for its long-term strategic view and recognition of investment drivers like load growth and asset health.

Portfolio Streamlining and US Transmission Opportunities

National Grid has streamlined its portfolio by completing the sale of National Renewables and announcing the sale of Grain LNG. Concurrently, National Grid Ventures is exploring new competitive transmission opportunities in the U.S., such as a potential transmission line from Maine to New England, leveraging its expertise in familiar regions.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.