Good morning. I'm Paula Reynolds, and I'm the Chair of National Grid, and I want to welcome you to the 2024 AGM. Thank you very much for coming. For those of you who are with us in person here at Warwick Conferences at the University of Warwick. You know, our main campus is located quite nearby, and a substantial number of our employees are based here. Warwick is also the home of our UK transmission business. So holding our meeting here gives us the opportunity to invite some of our employees to join us in person, see what an AGM looks like in person, and for the board actually to travel around to various of our nearby operations areas while they are here. So again, my thanks to those of you who've made the journey here today.
As per the notice of the meeting, today's AGM is again a hybrid one, so we do have the opportunity for live engagement for all attendees, whether you're in the room or you can actually participate over the internet. And we'll cover the details of how attendees can participate in a moment. But first, I would like to introduce you to the board members who are with us in the room today. Of course, on stage here, I'm joined by our CEO, John Pettigrew, who many of you know, and Andy Agg, our Chief Financial Officer, and we have a new Group Secretary with us today, Julian Baddeley.
Also in attendance, and you may have actually, I hope, met them in the lobby outside before the meeting, are our non-executive directors, and so I'm gonna ask each one of them to stand as I call their name, and maybe they can give a look around so that you can see them if you are sitting behind them. So, first, Ian Livingston, our Senior Independent Director, Ian Mackay, the Chair of our Audit Committee, Anne Robinson, Earl Shipp, who chairs our Safety and Sustainability Committee, Jonathan Silver, Tony Wood, and then last but not least, our Head of Remuneration, Martha Wyrsch.
Unfortunately, we do have one other director, Jacqui Ferguson, and Jacqui did come yesterday, and she was intending to be on a field trip with the group, but she was unwell, and the group decided that they really didn't need her in the van if she was unwell, and unfortunately, she's still unwell and unable to join us here in person. Okay, onto the order of business. I'll offer just a few brief remarks on behalf of the board, and then we'll pass the podium over to our CEO, who will share with you the overview of the business in the last 12 months. We'll then take questions from shareholders, following which we'll do the formal business of the meeting, where we'll consider the resolutions that were set out in the notice of meeting.
Ah, given the events of last week here in this country, the words growth and change are very much in the air, aren't they? And at National Grid, these themes are very much how the board has sought to help guide the company over the last year. Indeed, really, growth and change have been the themes over the last several years. We've conferred with our management on how to focus on the most important businesses, how to allocate capital to those businesses, how to ensure the growth in the future on behalf of you, our shareholders, how to change, become more efficient, more digitally enabled, how to use technology to make the business better on behalf of customers.
You know, you've no doubt read in the general media that the demand for electricity is likely to increase quite significantly because of advanced computing, AI. You know, our role at National Grid is to enable this growth through the construction of major infrastructure, and so in doing so, you know, we feel that we're part of a higher mission, which is that we support the nations where we do business, we create jobs, we uplift our communities, we ensure the flexibility and resilience of our energy systems for the future. Over the next decade, National Grid anticipates commissioning a significantly larger amount of new and upgraded infrastructure compared to the previous years, and John will cover some of that with you, and you got a little bit of a sense of it in the video as well.
Despite the challenges of mobilizing the global supply chain, navigating the planning and permitting complexities, the board is confident in National Grid's ability to deliver these ambitious goals. It's really a privilege for me and my fellow board members to be part of this company as we innovate to achieve these challenges ahead. To accomplish these ambitions, you'll know that we recently offered shareholders the right to purchase additional shares in the company. This process, a rights offering, provides National Grid with the necessary resources to invest in future infrastructure while maintaining the financial strength of the company. The board's quite gratified that the opportunity to invest further was overwhelmingly supported by shareholders, namely, 91% of the shareholder base invested further in National Grid, and the company raised, in total, GBP 7 billion. The board also recognizes that a rights issue is a complex process.
We certainly learned that ourselves in coming to the decision to approve this way of raising capital. When you actually go out to do a rights issue, that's a limited timetable, and it's done this way so that the potential to get the subscription and obtain the capital is done in a way that you hope that external events or market disruptions won't get in the way of your actually getting the rights offering done. This timetable meant that shareholders were only given a very limited window in which to make their elections, and we do know that a small number of individual shareholders did not fully understand what steps that might take, or they ran out of time to exercise their rights. During the course of the meeting, our CFO, Andy Agg, can answer questions about the rights issue and how it works broadly.
Some of you may be here with questions about the process, or you may be online with questions about the process and what it means for you. So in advance, let me, first of all, offer apologies for any lack of communication that the offering process might have created. But I'd ask you to hold individual questions about your holdings or your situation for our registrar's Equiniti. I really wish you people would change your name. It's really a mouthful for people at the podium. But anyways, our registrar's Equiniti handled that, the administration of that program, and they are the ones who can actually answer any individual questions. So they're available after the meeting to speak with you on any queries you might have related to your own shareholdings.
This capital raise of GBP 7 billion was the largest in the UK market in many years, and now it does provide us with the financial flexibility to deliver on the group's strategy. Therefore, on behalf of the board, I'd like to thank all of you shareholders for the strong support of the company and its future investment plans. It is, you know, exceedingly reaffirming. There you go.
So thank you, Paula, and good morning, everyone. It's great to see so many of you here this morning, with others joining virtually as well. So when I spoke to you a year ago, I said that energy had been in the spotlight, and as I look back on the last 12 months, that certainly still holds true. In fact, our economy is becoming increasingly digital, electrified, and decarbonized. The need for greater amounts of clean energy infrastructure has never been more pressing. And with the broad recognition that a decarbonized energy system will help with energy affordability and security supply, whilst creating new green jobs and unlocking future economic growth, governments, regulators, and industry in both the U.K. and in the U.S. are increasingly focused on achieving this goal.
Our pivot towards electricity has cemented our position as a major player in this energy transition, and we're ready to take advantage of the significant growth opportunities ahead for National Grid. All of this means I have a lot to cover in my update to you today. Let me just take a moment to set out what I'd like to share. I'll start by covering the announcement of our new five-year plan and the comprehensive financing package that sits behind it, before moving on to an overview of our financial and operational performance over the last year. Then finally, I'll set out our priorities for the year ahead.
Let me start by reminding you of the details of the announcement we made in May, in which we set out a significant step-up in growth with a new five-year financial framework, delivering around GBP 60 billion of capital investment between now and 2029. This is nearly double our investment over the prior five years. It will be broadly split 50/50 between the UK and the US, and 85% of it will be green investment aligned to the EU Taxonomy, making National Grid one of the biggest investors in clean energy in the FTSE 100. This investment will drive group asset growth of around 10% per annum, which will see the group's regulated asset base reach almost GBP 100 billion by 2029.
It will also deliver a 6%-8% earnings per share annual growth rate, and an inflation-protected dividend from a rebased level, representing an attractive investor proposition of growth and yield. This investment is supported by a carefully balanced and comprehensive financing plan, which includes selling assets to redeploy capital, rebasing the dividend, continued use of debt financing, utilization of our scrip dividend program, and as you know, raising equity through a successful GBP 7 billion rights issue. Turning to the rights issue, which offered eligible shareholders the opportunity to support our five-year plan and participate in expected growth by purchasing additional shares at a discounted price. By offering new shares in proportion to each shareholder's existing holding, a rights issue is considered as one of the most inclusive ways to raise capital and is a standard way of raising equity in the UK.
In our rights issue, National Grid shareholders had the opportunity to buy 7 new shares for every 24 shares they already owned, at a price of GBP 6.45 per share. Shareholders had the option to take up all of their rights offered to them, to sell some of their rights and use the proceeds to take up the remainder, choose to sell all of their rights in the market for cash, or do nothing so that the rights could be sold on their behalf at the end of the rights issue, also resulting in a cash payment. Put simply, this means that those shareholders who did not participate still receive some compensation. Turning to the dividend, which we know is an important part of what makes National Grid attractive to investors.
Given this, we carefully considered the balance between changes to the dividend and the amount of equity needed to support our five-year plan. As a result, we took the decision to keep the total overall level of the dividend the same, while maintaining our policy to grow the dividend in line with UK CPIH, a measure of UK inflation.... However, even though we are distributing the same amount overall, as a result of the rights issue, we now have more shares in circulation, so the dividend per share is lower. This rights issue was the largest in Europe for 15 years outside of the banking sector, and on behalf of the board and all my colleagues at National Grid, I'd like to echo Paula's thanks to our shareholders for your support.
Our shareholders have also shown confidence in our ability to deliver on the scale of the network investment that we're making. Our track record of delivering critical infrastructure projects on time and on budget speaks for itself, with recent examples, including the GBP 1 billion Hinkley Point C connection and our strong progress on the $4 billion electricity transmission program in New York, or the Upstate Upgrade, as we call it. We're developing the capabilities to deliver large-scale projects offshore as well. With the recent completion of Viking Link, our interconnectors portfolio is now nearly 8 GW, which represents around 80% of the UK's interconnector market. Given the growth that we're seeing in our energy networks, we've taken the decision to refine our strategy to make National Grid the preeminent pure-play networks business.
As a result, we're planning to sell National Grid Renewables, our U.S. onshore renewables business, as well as our Isle of Grain LNG terminal in the U.K. Going forward, therefore, our National Grid Ventures business will focus on interconnectors, including offshore hybrid assets in the U.K. and competitive electricity transmission in the U.S. So with that, I'll now look to share some of the key headlines from our full-year results. We delivered another year of strong financial performance, demonstrated by underlying operating profit of GBP 4.8 billion and underlying earnings per share of GBP 0.78, both up 6% on the prior year at constant currency. Our regulated businesses delivered a record GBP 7.6 billion of investment, 17% over year-on-year against constant currency.
In UK electricity transmission, we delivered a 47% increase in capital investment, reflecting early progress on our ASTI projects. It was also a year of impressive firsts. We connected the world's largest wind farm, Dogger Bank, and the Larke Green Solar project, the first of its kind to be connected directly to the UK transmission network. In New York, where investment increased by GBP 300 million to GBP 2.7 billion, we made strong progress on the $4 billion Upstate Upgrade program, which includes 70 projects, all enabling clean energy over the next decade. In Massachusetts, we filed for $2 billion of funding for our future grid plan, an important milestone in setting out the investment required over the next five years to help the state meet its clean energy goals.
In National Grid Ventures business, our sixth interconnector, Viking Link to Denmark, came online in December, within budget and earlier than planned. At 765 kilometers, it's the world's longest onshore and subsea HVDC cable and a great example of the world-class capabilities within National Grid. Finally, the team has made great progress on the separation of the electricity system operator, and we expect to complete the sale and transfer to the government later this year. It was a year of strong progress, both financially and operationally, and we've taken the necessary steps that will set the group up for success in the long term. Let me now take you through our priorities for the year ahead before I hand back to Paula. Starting with the U.S., where we're investing nearly half of the GBP 60 billion of capital investment.
In New York, we're increasing our investment over the next 5 years by 60%, with expected CapEx of GBP 17 billion. This will be driven by our Upstate Upgrade investment I mentioned earlier, where we'll construct or rebuild more than 1,000 miles of transmission lines, making it the biggest investment in New York's electricity transmission network in over a century. We also plan to invest $5 billion over the next 3 years in our downstate gas businesses as part of our new rate plans for KEDNY and KEDLI. Looking at the priorities for the year ahead, downstate, alongside stepping up the levels of investment, we'll be focusing on our new higher load return of 9.35%. Upstate, we're focused on finalizing our next rate case for Niagara Mohawk.
On the policy front, we'll continue to advocate for our clean energy vision and the work that we do in support of balanced and affordable energy transition. In New England, we've set out investment of GBP 11 billion over the next 5 years, including investment in advanced metering, grid modernization, storm hardening, and asset health work, alongside our continued investment in our leak-prone pipe replacement program in our gas business. A key priority this year is to agree new rates for our Massachusetts electric business, and as in New York, we'll continue to advocate for further regulatory reforms consistent with our clean energy vision. Turning to the UK, where the next 5 years will see us invest over GBP 30 billion and connect more renewable energy to the system more quickly than ever before.
In our UK electricity transmission business, we'll invest around GBP 23 billion over the next 5 years. The investment is already underway, and our priorities are focused on ensuring we make significant progress this year. For example, our ASTI projects are already moving ahead at pace, and over the next 12 months, we'll commence construction on 3 offshore and 4 onshore projects, including the Eastern Green Links 1 and 2 offshore bootstraps, the latter being the largest-ever investment in electricity transmission in Great Britain. Another of our key priorities is to ensure that we have the right supply chain to support our capital program, and we've already taken significant steps to progress this.
Finally, on the regulatory front, Ofgem is due to publish its methodology decision document for RIIO-T3, and we'll be submitting a fully funded business plan at the end of this year, ahead of a new price control beginning in 2026. Moving next to UK Electricity Distribution, where we expect to invest GBP 8 billion over the next five years. With four years remaining in our ED2 price control, we have a high degree of visibility around the investment levels, and 95% of our CapEx agreed is within baseline allowances. In the year ahead, a key priority is to continue to deliver the capital program effectively, with a focus on delivering a target of 100-125 basis points of outperformance and synergies of GBP 100 million over three years.
We'll also continue to progress connections reform at the distribution level, where we're making good headway. Then finally, in National Grid Ventures, our key priority this year is to progress the sale processes for our Isle of Grain LNG terminal and National Grid Renewables business. In both of these businesses, we've delivered impressive growth and believe there will be significant interest in these assets. So in summary, this is a defining moment for National Grid as we enter into a new and exciting phase of growth to deliver network investment of unprecedented magnitude. In my 33 years in this sector, it's the most exciting time that I've known, and it's a tremendous privilege for all of us at National Grid to work right at the heart of the energy transition, driving forward huge change.
I believe National Grid has a unique investor proposition with low risk, high-quality asset growth, strong earnings growth, and an inflation-protected dividend. We now have the visibility of GBP 60 billion of investment through to 2029 and complete confidence in our ability to deliver it, as well as the certainty around financing our plans. The business is increasingly weighted towards electricity, ensuring that we can continue to access attractive growth for many years to come. National Grid is enabling the digital, the electrified, and the decarbonized economies of the future. This is opening up opportunities for us today, over the next five years and for decades to come, ensuring that we can drive long-term value growth and returns for you, our shareholders, enabling net zero for the UK and Northeast US, and creating growth across the communities we serve. So with that, I'll hand you back to Paula.
Thank you, John. And actually, I think maybe to take a moment, when you think of the sheer number of things that are going on, this is actually a great opportunity to say thank you to John and Andy and really the entire team, of our thousands of employees in two countries, because it, it takes everybody to deliver this kind of program. So thank you. Okay, so before moving to the formal business of the meeting and voting on the resolutions, I'd like to address questions from shareholders on any matters relevant to the business. Julian, our Group's company secretary, will be coordinating the Q&A session for us. So to be fair to all participants, Julian will endeavor to alternate between questions in the room and any questions registered online.
If there are online questions that have been pre-submitted and are similar in thrust, Julian will group them together so that we can be efficient in providing answers. And, to keep the meeting flowing briskly, we'd ask that you keep your questions, relatively concise, and remember that questions regarding the individual holdings should be saved for, discussion with our registrar after the meeting. Please remember that the questions should be directed to the business of the meeting, and if you have other general questions about the company, not related to the business of the meeting, I'd ask you to hold those questions till after the business meeting is formally adjourned. John and Andy and I will be in the lobby after the meeting concludes, and you can speak with us, and we'd be glad to, you know, converse.
If you're participating online and you have general questions unrelated to the meeting, we will reply to those questions by email after the meeting concludes. So I think with those preliminaries, I'll turn it to Julian, and take it away.
Thank you, Paula, and good morning, everyone. For those of you joining electronically, if you've not already pre-submitted a question, you can submit one now by selecting the messaging icon that sits in the navigation bar at the top of your screen. Type your question into the text box at the top of that page. For those of you attending in person, I know many of you here have pre-registered questions at the desk, and thank you to those that have taken the time to do so. If you did not register your question earlier, but still wish to ask one, please make yourself known at any point to one of our representatives. They will take you to a question point and inform you when it is time for you to ask your question.
When asking your question, please begin by giving your name, and direct all questions to Paula in the first instance. We will start with a question in the room today from James Hewitts.
Good morning, and thank you. My question, I hope it's not too long, it expresses anxiety, but I hope it's constructive. I subscribed to the recent rights issue as an independent shareholder. I'm anxious that our company is laggard, implicitly by choice, in developing the U.K. grid in ways which anticipate long-standing climate change imperatives. That's one t he next part is slightly different. I understand that the leading single-site supplier of electricity to the U.K. grid, Drax Power Station, is also the U.K.'s leading emitter of CO2, and therefore not clean power. It will lose its primary subsidies in 2027. If the U.K. is to decarbonize the grid by 2030, which it, instead of 2035, Drax Power Station would have to close before then.
It would presumably be remiss if we do not take steps to ensure that other generators do not make up the shortfall, and we should be preparing for that. What does our company consider is the probability of having to do this, bearing in mind that Drax's proposals for carbon capture are implausible and hugely energy intensive, geological storage sites for captured CO2 are unlikely to be operating as proposed by 2030, and the forests from which Drax derives fuel cannot recover soon enough? Thank you.
Well, that was a very worthwhile and serious question, so we do appreciate it, and I'm obviously gonna give this to John to answer. But I would just say in overview, that we are already working with the new government about how 2030 can be achieved with multiple scenarios. And so, we are all on the case together, and I think what is really encouraging about this is the fact that within, you know, almost minutes of the new government forming, they came into activation around how industry would begin to work collaboratively around trying to secure 2030. So with that, John, I'll bring to you.
Yeah. Thank you, and thank you for the question. I mean, I don't think it'd be a surprise to you to hear that National Grid spends a huge amount of time, both with the government and key stakeholders and regulators, making sure that we understand what we're being asked to do as part of the energy transition. It's quite clear that in delivering a fully decarbonized network, it's gonna require everybody across the sort of spectrum to take action, whether that's government putting the right policies in place, regulators taking decisions in a very nimble way and making sure they've got the right regulatory frameworks, the supply chain, making sure there's the capacity to be able to build the equipment.
National Grid has got a role to play, and the GBP 60 billion of investment that we set out in May is our part of that role. And in the UK, as we said, you know, nearly half or half that investment is in the UK. Up until, you know, last week, obviously, the targets in terms of decarbonization was to get 50 GW of offshore wind connected by 2030 and to fully decarbonize by 2035. As Paula referenced, the Labour government's come in with a new target, which is it's aiming to decarbonize by 2030. That is a huge ask, and hugely ambitious. We will work with the government, we will work with the regulators on what that means, what are the implications for that, and what can be achieved in those timescales.
There's no doubt that it is a significant and ambitious target to be achieved. In terms of Drax specifically, rather than talk about Drax specifically, I think it is important as we think about the energy, the energy transition, and we think about the increased reliance on intermittent generation in the UK, that we also think about what's the backup associated with that. In order to be a decarbonized economy, we're gonna need to think about potentially carbon capture and storage, and I know that the new government is thinking about that. We're probably gonna have to think about hydrogen as a storage, as an opportunity there, as well as other technologies like nuclear. All of that is being considered in the round, if you like, as we think about how the energy transition unfolds.
Can I just say thank you for that? And I would certainly feel very much more comfortable if there was more explicit emphasis on how we're going to manage reduction of demand. 'Cause I, I'm not so sure that we're going to be able to meet 2030 if we're going to carry on, sorry, growing as projected. And so maybe somebody, and you're pretty central to it all, could advise that.
Yeah
Let's reduce consumption big time.
So just one thing to add. So, so one of the roles that the electricity system operator has played historically and will continue to play in its new form, is to always be looking forward at what is the load forecast that's coming into the U.K., and what's the generation background, and what's the plant margin, so what's the surplus generation over that? And the reason they do that is to look far enough out so that then action can be taken if there is a concern that there is insufficient to meet generation. So they've recently published an early indication of next winter, in which they're expecting the plant margin to be around 9%, which is actually slightly higher than it was previous years. So to give you some comfort, there are.
You know, what was part of National Grid, what will be the new electricity system operator, is always looking to make sure that they can see what's, you know, how the energy margin is gonna unfold.
Thank you very much.
It's actually such a timely question as well, because tomorrow at our board meeting, we have a specific segment devoted to the resource picture and the demand picture in both of our countries where we do business, because of the fact that we have these very similar concerns, and there's quite a bit of analysis that's been presented to the board, and we're gonna try to see if we come to a common view out of it, but very much engaged in this very, very, very significant question.
Next question, thanks, Paula, is pre-submitted, on the rights issue from, Andrew Pierce. And the question is: In National Grid's provisional allotment letter to shareholders in May, why was the value or price of the rights offered to shareholders quoted as GBP 6.45 per share, per right or share, sorry, whereas when shareholders elected to sell their rights, the proceeds they received were much less than this? Why was the sale price per share or right, as opposed to the purchase price, not stated clearly in the letter?
I think, Andy, this goes right into the category of there can still be questions about the rights offering.
Sure.
So would you please?
Thanks, Paula, and thank you for the question. I think you know, as we said in the intro remarks, we recognize that the rights issue was a complex undertaking, and a lot of the guidance was therefore, you know, also complicated. But as the question, I think, alludes to, the £6.45 that was quoted was effectively the discounted subscription price for the new shares. So the question there for the difference between the two, i.e., the value of the rights, is therefore determined by the market. And actually, during the trading period or the two weeks when the rights issue was open, those rights are traded on the market, and therefore the value changes.
So one of the reasons we weren't able to quote that up front is because we don't actually know until the rights issue itself closes. Absolutely, when the—when shareholders either chose to sell their rights or their rights lapsed because they didn't respond or chose not to respond, then, yes, the £1.90, which was the premium, the difference determined by the market at that point, was then paid over to shareholders. So the reason we couldn't give it up front was effectively we had to let the market determine that price over the two weeks of trading.
Thanks, Andy, and thanks, Mr. Pierce, for the question.
Right. Of course, if there's follow-up, we can answer that in email form after the meeting.
Next question's live in the room at Point B, Sophia Howard.
Yes. Good morning, Chair. My name is Sophia Howard, and my question is that I would like the company to give a standard of professional accountability, so that the named person in the pensions update booklet provides a signature, just a sample signature, so that we can. There's a way of checking who they are, and there's a trend to using more electronic communication, but there's a risk that artificial intelligence can be abused. So I think that might be a way of strengthening the company's pensions operations.
Well, thank you very much. I think actually in your question, there's kind of a couple of layers, which is who, who is the signatory, in fact, to the pensions update report, and how do we assure that it's not susceptible to any kind of cyber intrusion? And so, Andy, I think we'll give that to you, if we could.
Sure. No, and thank you for the question. And what I'd say is generally we take cybersecurity and, you know, the risk, as you call out around scammers is real and growing, as we know. I think in this particular instance, we also have to work with the trustees of the pension scheme, because I think the booklet you're referring to is actually a trustee publication, which is independent of management and the company. But absolutely, we'll make sure that we take that feedback back, and we'll work with the trustees to see if we can enhance anything in that space as well. But the broad point is well made, and thank you.
Yeah. Thank you.
Okay, the next question is received online from Richard Trevithick. "Is the five-year CapEx plan fully funded from existing resources, or will there be further rights issues?
Well, John, I think you alluded to that in your prepared remarks, so why don't you take that and give assurance here?
Yes. So thank you, Richard, for the question. Yeah, so I can give assurance that, you know, the plans that we've laid out, of the GBP 60 billion over the next five years is fully funded, not just by the rights issue. As you heard in my remarks this morning, actually, we have a comprehensive financing package that includes a number of things, including access to the debt markets, as we said, a rebasing of the dividend, as well as some sale of some assets as well. But when you put it all together, that is a financial plan that supports the GBP 60 billion of CapEx over the next five years.
And so to clarify, for that question, we do not have in that plan any intention of further rights issues because of the fact that we have access to capital markets in other ways.
The next question is in the room from Fiona Gilmore.
Good morning, Chair, Chief Executive, Board of Directors, ladies and gentlemen. I'm Fiona Gilmore, founder and director of Suffolk Energy Action Solutions. I'm also a shareholder, and I applaud you on your results today. We are a community group promoting the benefits of offshore solutions with landfall and connections to the grid at brownfield sites closer to demand. I'm not a NIMBY. I'm not actually on the front line. I'm an unpaid volunteer who was hoping in retirement to write a book, but instead, I found myself running this group. We wish to influence the strategic planning of energy infrastructure in the U.K. and globally. We have ecologists, engineers specializing in HVDC. We have superconducting producers in the Republic of Ireland. We have innovators, entrepreneurs.
I was a strategic advisor in alternative fuels in the Middle East for some years, and I'm a bit of a geek now, even though I was a modern linguist from Cambridge. And the reason I've spent so much time in the last five years speaking to Belgians at Elia, speaking to TenneT in Holland, speaking with the Danes and the Germans, is I applaud their innovation. I applaud the fact that they use holistic network design criteria, and I applaud the fact that they recognize that sometimes we can get a bit carried away, and we lose sight of balance. And on page 43 of your wonderful report, you say that you need to understand what fair means. Now, we all know the term asymmetric warfare.
I think we can ascribe the word asymmetric energy infrastructure and think about if so much electricity is used as a through road in one small area of five square miles, in this particular case, this coast of Suffolk, is that asymmetric in the fact that it is unequal? That the burden that is imposed on the communities, and the wildlife, and the environment was never actually realized in 2017, when your team had one PLC group, it wasn't separated as an electricity system operator. Was it, if you like, nobody's fault? You thought about this as the right place, and suddenly it's mushroomed, and we welcome Great British Energy, we welcome the acceleration towards these solutions.
But is it now the case that we should really think about— And I think of Mark Carney's Reith Lecture speech, where he said so eloquently, "How do we value in our society those things that do not have a price tag? How do we value our nightingales, our ancient hedgerows, and oak trees?" Is this an opportunity for National Grid to do brilliantly well by having the imagination as well as the common sense to say, "Hey, guys, in 2017, that looked like a great idea, but actually, in 2024, when we want to accelerate, let's do what Ofgem is proposing, and let's go for cheaper, faster acceleration of offshore solutions. Let's use the word grid." You're a bit shy of that word.
Let's use it, and let's do what makes sense." And so I'm asking you the question, one, when you look at your election of directors and non-executive directors, is your board not really, truly diverse in the fullest sense today? In other words, yes, it's diverse in terms of cultural identity, ethnic groups, and gender, but is it diverse in terms of where is your ecologist? Where is your environmentalist? Where is your community representative, someone like me? Where are these people who are challenging and being devil's advocate at board level, saying, "Have we got asymmetric energy infrastructure?" And my second question is, you say brilliantly well in page 43, you need to deliver energy security fast.
But is this an opportunity now to say, "Hey, these North Sea countries, yes, their wind farms are smaller than yours, but actually, we can carry 10 gigawatts by 2032 in HVDC superconducting cables. We can take this energy to brownfield sites, pre-industrialized sites, so that these 26-meter-high concrete monolithic converters and substations covering 80 football pitches of tarmac and concrete, they're not plonked in this area of outstanding natural beauty and SSSI, which is actually our rainforest." It is the equivalent of a rainforest. It's called vital lowland wetlands.
So I would like to invite you, the chair, the chief executive, and your board, and BlackRock, your major investor, Vanguard, and the UAE, to come to Suffolk Coast and Heaths, to talk with our community, to hear our views, which we don't think have really been heard, and to talk about these innovative solutions that we think could be a win-win for Britain, a win for you and your shareholders, and a win for the interests of this country, because we mustn't forget that we have one chance. Thank you for your attention.
Well, thank you. Thank you very much for that very thoughtful discussion. And it's very clear that we can't possibly address all the points that you have raised here, nor do I think that you want us to. You want to be heard, and you wanna make sure that you've left an impression. So let me try to get to the couple of questions, turn it to John, and just suggest that we need to have a way to convene offline. And the first is with respect to the issue of the director slate and why there is not an ecologist on board. You know, there are many disciplines on this that are not on this board, and really, what the role of the board is to make sure that it's taking the proper advice about these things.
I can assure you that there's been quite a bit of discussion about permitting, siting, biodiversity, replacement of the natural habitat, reducing the impact. And in fact, a number of directors were actually out in, I think, East Anglia yesterday. And I myself have actually been out and traveled the country. I've actually learned quite a bit about the about the geology, geography, and bio biosphere in this part of the world. It's been quite fascinating, and you know, I actually, you know, feel this heartfelt expression on your part. I absolutely take this in because this is a country that many people say to me are, is biologically used up.
And so, so much of what we do is not just to restore, but to increase, the biodiversity in anything that we touch, and we certainly take that quite seriously. So, no, we don't have, an expert who's an ecologist on the board, but there is plenty of discussion going on about, our route selections, our process, the quality of engagement. And we do not live in a little bubble where we don't, hear about this and read about this, and really, we embrace every opportunity to be trying to navigate this together. So I can assure you, beginning of a conversation with you, there are many conversations going on. I'll turn it to John to maybe speak a little bit about some of the process, and, again, we look forward to conferring with you afterwards.
Thank you so much.
Yes, and thank you. Thank you for your, your articulation of all the issues. I, I'm gonna start by just painting a bit of a picture of the context of, of, you know, how we think about it and the network so that everybody's got the broader picture. The network in the U.K. was built in the 1960s and 1970s, as you know. Predominantly, the infrastructure is in the middle of the country, linking the power stations that were fueled by coal, and taking the energy, all over the country, but generally north to south, where, where the large load is. There is very little infrastructure actually on the edges of the country, and there never has been.
The government setting a policy, which is to move to fundamentally a generation backbone system in the UK, which is gonna be driven by offshore wind, and a target of 50 gigawatts of offshore wind, creates a huge challenge in terms of how do we get the power from where it's being produced to where it's going to be consumed? And that is the obligation that National has, National Grid has, and that our role is to make sure that we build the infrastructure to get it from where it's produced to where it's consumed. And as we think about that, we ensure that we follow all the guidance that has been set out by government in terms of the National Policy Statements and the Planning Act. So we always start by optioneering and looking at all the possible options that are available to us.
We are not constrained in any way when we start that thinking, and we look to balance a number of factors, which is the obligation that we have. So we have to take into account the cost of the infrastructure because customers pay for that. We have to take into account the engineering feasibility of the solutions, the environment, both offshore and onshore, and we also have to take into account the views of the local community. And we try and, as we walk through the consultation process, try and balance all of those different competing factors to come to a recommendation that we ultimately make to the planning authorities, and as you know, the Secretary of State will ultimately sign on to.
We also, in doing that, also look at what is the latest and most available technology to deliver those solutions, while having to ensure that we meet our license obligations. So at the moment, we have a license obligation to deliver a significant amount of transmission by 2030 that has been placed on us by the regulator. We're in the midst of series of consultations, as you know, on the East Coast, and we are spending a huge amount of time with local communities because we want to hear what their concerns are and try and find a balanced solution, which ultimately we can then put forward to the Secretary of State as a recommendation. But if you look at over the course of the last few years, we're putting more and more infrastructure offshore than we ever have before.
But ultimately, the reality is it has to come onshore at some point, and with very little infrastructure on the East Coast, you know, from Scotland down, ultimately, we have to find a way of building the infrastructure to deliver that, whether it's overhead lines, which is the presumption, that we have in the national policy statements, although there are exceptions in areas like, Areas of Outstanding Natural Beauty, National Parks, or where there are, other reasons more locally. But we have to take all that into account, and as a result of that, that's what we've been doing so.
Thank you for your answer. I think my final word on that is brownfield sites closer to demand, we believe, should be part of the design principles for the spatial energy planning, as Nick Winser proposed and as Ofgem are now recommending. And that's where I think there's an opportunity for just a reshift, and something that I hope we can carry on a conversation with over the next few weeks and months.
Yeah.
Absolutely. Thank you very much for this thoughtful discussion and bringing it in here today.
Okay, our next question has been submitted online by Martin Singleton on behalf of ShareSoc and UKSA : With the consistent outflows of institutional capital from the U.K. since 2021 and the U.K.'s struggle to maintain its status as a preeminent capital market, what is National Grid's view on engaging its retail shareholders, and what practices does it employ to ensure that this base, which includes employees, is sufficiently engaged and informed on company matters?
Well, thank you very much for the question. And, you know, there are various forms of engagement that we undertake, and of course, the AGM is one of them, and by going to a hybrid format, it is really open. This meeting that used to be only in person is now open to every shareholder we have. Some 600,000, I think, is our current count. So I think that that's number one, is any question can be asked at the AGM, in person or remotely. Second, of course, is through the investor relations department and the corporate secretary. Again, any kind of engagement, any kind of availability, there's the ability to contact us, and we endeavor to answer every question.
The third, of course, is that we have an extremely extensive investor relations outreach, and John and Andy and Nick Ashworth, our head of investor relations, have done hundreds of meetings, hundreds, around this recent Rights Issue. Now, these are dominantly to institutional holders, but institutional holders hold on behalf of retail shareholders. So that's another form of engagement of how that information is transmitted, and in fact, a retail shareholder can access it through the institution with which they participate. Fourth, there are many, many resources online and available at all times. Everything from the investor relations presentations to lots of enrichment sessions, where you can learn more about our company. Once a year, I meet with the Retail Shareholders Association, which is an association of retail shareholders, and I think I could go on and on here.
If there's any sense that you don't feel that you have access, you know, please use the opportunity to get in touch with us online, and we think that we're a pretty highly accessible and available company, and certainly always doing our best to be as transparent as we can possibly be in terms of the information that we make available. So I think that hopefully covers it.
Very good.
Good.
So the next question's live in the room at Point B, Patricia Eveson.
Good morning.
Morning.
My name is Patricia Eveson, and I just live up the road in Solihull, and obviously, I'm a shareholder. I made a special effort to come here today in person, expecting to see demonstrations about your business, in the hall, as there was in 2019 in Birmingham. Otherwise, I would have come to the AGM online. Have you stopped doing that now? There used to be demonstrations about your business plan, your business, the helicopters or, or the wiring and, and what National Grid does, and I found that very good. I also have been speaking to other people in the room who are expecting that. Have you stopped doing that now, or do you plan to do it in the future?
Well, thank you for the question, and I actually did get some feedback from another participant that they, too, were a bit disappointed that we didn't have displays. And I think as you can look at the size of the number of shareholders that we have in the room, the issue is, there has—we have noticed over the years, and particularly since COVID, a real decline in the level of interest of members, retail shareholders from the public broadly, who come in and come to these meetings. And so we've really started to look at the expense of the meetings, you know, how much space we have to have available, you know, what the orchestration has been, and again, increasingly, so much has gone to online.
As a company, and I know this part can be just a bit controversial, we try to be a digital-first company. You see less paper from us now than ever before. We try to push as much information as possible out through digital means, and so, yes, we don't do the demonstrations anymore. I would say, though, we also, again, want to be very open. If you have particular interests, I'd encourage you to let us know about your specific interests, and we are more than glad to get you out to a site and see work going on in your area. We did recently do actually an innovation conference in London, where we brought together a lot of the new technologies that we are piloting as a company, and if that is your interest, let us know.
We certainly would be delighted to, you know, entertain members of the public to know more. But we just don't want to start bringing in lots of kit anymore because we do have a very limited audience for it at the AGM. And I think you'll find we'll probably continue to move the AGM around our broader service territory to try to give members of the public some opportunity. But I think you see that it is a bit of a, a bit of a ritual that has kind of contracted over the years.
Thank you.
Could I? I was just going to make an advert. So if you go onto YouTube, National Grid's got a series at the moment of sort of behind the scenes of what makes the grid. So, I would just promote it because it, for people who are interested in National Grid and what we do, I think you'll find it really enjoyable.
Thank you for that.
So our next question is an online question from Councillor Rob Chapman, who's the vice chair of the Local Authority Pension Fund. So the LAPFF, the Local Authority Pension Fund Forum, is a collaboration of over 80 local authority pension funds seeking to promote high standards of governance and corporate responsibility. Collectively, we are a significant shareholder in National Grid on behalf of millions of ordinary pensioners and workers. I would like to congratulate National Grid on announcing its expanded capital expenditure plan and climate transition plan, which are a significant step in meeting the growing needs of the energy transition and net zero targets, and something that LAPFF has been pressuring for. However, these plans do understandably require raising funds from shareholders through the rights issue.
In light of this, how confident are you that you will generate acceptable returns for shareholders, and does the election change this in any way?
Well, thank you, Rob, for that question. I hope you're listening online. We have had really a very good rapport with the Local Authority Pension Fund Forum and its advisors. Each year, we actually make sure, as a stewardship matter, that I meet with them because of the issue of the governance of the company. Obviously, I'm gonna turn this question over to, I don't know, it's kind of a toss-up between John and Andy, but Andy hasn't had a thing to say in the last bit. But I think, you know, this question of, can we assure that this plan will in fact be remunerative to shareholders?
I think he'll want to take that, and then John might want to reflect on the fact that we are in conversations with the new government, and he could talk, give a little bit of a flavor for that.
Yes, and thanks, Paula, and thank you for the question. Yeah, so let me touch on sort of the returns piece, and then, as Paula said, John will touch on the election impact. You know, when we announced both the investment plan, the GBP 60 billion of investment over the next five years and the financing strategy, including the rights issue, we also talked very clearly about the earnings that we expected and that we're pushing ourselves to generate from this plan. And we gave guidance of looking at an earnings CAGR over the next five years, a compound growth rate of between 6% and 8%.
And it was very important when we spoke to all of our investors, that we were able to show how the investment that we're setting out, and the GBP 60 billion, would provide a return, an adequate return. And that was very much part of the dialogue, that we've been having with investors, and as Paula said, in the hundreds of meetings that we've had with many investors since those announcements. So yes, of course, we will have to continue to work on that, both in how we deliver that investment efficiently and effectively, and of course, how we meet our regulatory obligations as well. That's what we're focused on. But no, we're confident that we will continue to deliver, you know, good solid returns off the back of that investment.
Yeah, and just to add to that, both from a government perspective and a regulatory perspective, the shareholders won't be surprised to hear that given the role that National Grid plays, then we always spend a huge amount of time, both with the government and with the opposition parties, to make sure they understand the role that National Grid is playing and for us to get a better understanding of what's on their mind. So in the run-up to this election in the U.K., for example, myself and the management team spent a huge amount of time with Ed Miliband, who's the new Energy Minister, as well as Rachel Reeves, the Chancellor of the Exchequer.
And what we learned through that process was they are very keen, as you've seen in the press recently, to stimulate growth in the U.K., and they see infrastructure as an important part of that. They recognize the role that networks play in enabling the energy transition, and they also recognize that some of the policy things need to change in order to enable us to do that. So I'm very confident, actually, that the investment plans that we've laid out will be supported by the new government. In fact, on the day that we announced the rights issue, Rachel Reeves actually tweeted that she was very supportive of the investment that National Grid was making. Similarly, regulation is clearly important for us as well in terms of returns, and we've got a very important price control coming up in the U.K. at the moment.
So we're in discussions with Ofgem on that. Ofgem, again, have publicly said that they recognize that actually, the investment needed over the next few years is very different to what's happened in the past, and that they need a regulatory framework, which is, in their words, investable, i.e., they want to make sure it's a regulatory framework that attracts investment into the UK and rewards investors. So more work to do on that. It'll take us to, as I said in my speech, till 2026 to agree it, but we're in good dialogue with the regulator on that as well.
Thanks, John. A question submitted in the room today for me to read from Hardip Gill: What impact will the new GB Energy company, which Labour has promised, have on National Grid?
Well, I think this one is anybody's guess, actually.
Yeah.
Yeah, so, you may recall that over the last number of months, there's been a discussion about the formulation of GB Energy, and originally it was at a quite a large number of budget, and then that began to change as we got closer to the change in government, the recognition of exactly what the budget constraints would be. So at this point, GB Energy is being funded by, I think, about GBP 8 billion over five years, and the first tranche has actually been granted to the UK Infrastructure Bank in order to look for investments that would further the energy transition. Obviously, we're very supportive of that. We're in touch with the UK Infrastructure Bank and watching the things that they have financed to date, and they've been more in the sort of battery and storage area.
you know, we await with interest, and, you know, we'll look forward to cooperate as it becomes more clear what GB Energy is intended to be.
Thanks, Paula. The next question is pre-submitted from Rosemary Pearson: What will National Grid do to ensure that its public consultations adhere to legal Gunning Principles going forward, so that the company's community engagement improves substantially and thereby reduces the planning risk and concurrent risk to shareholders currently associated with poor consultation in the East of England?
I'll start that and then turn that to John, because I think, Thank you, Mrs. Pearson, for your question. And Mrs. Pearson, of course, as you might infer, is quite active in the East Anglia area in terms of community participation.... as John has described, you know, the process of conferring with the public is quite detailed, and it's extensive, it's long-standing, and it is interactive. One of the things that I think some of our board members saw when they were out traveling yesterday was, for example, the tools we have where we can use 3D modeling of the landscape and look at what the addition of a piece of infrastructure actually physically would look like on the landscape. And so with that tool, our planners, they move it.
They can, they can move it, they can change the sight lines, they can add a shrubbery or whatever it would be in order to try to change the visual impact, and they do that with each and every comment that they get from the public. So I just want to give those of you who are here the assurance that we are not some monolith who comes through, and everything that John previously described, and everything we have talked about today in terms of this sensitivity to the natural environment, is very much the ethos of the company. So I turn it to you around the specific question about the Gunning Principles.
Well, a very simple answer, actually. I mean, right through the auctioneering, when we start to think about these projects, through the pre-consultation at the statutory stage, right through to the conclusion, when we submit to the planning authorities and the Secretary of State, we comply with the Gunning Principles, which is about making sure that they're legal and fair right through that process.
Thanks, John. A question submitted in room for me to put to the panel from Paul Castle. On page 145 of the annual report, it discusses the auditors' remuneration. Please, can someone explain why it was GBP 4 million for other assurance services for 2024, whereas in previous years it was much less?
Andy, that one is over to you. I think it's a pretty straightforward answer, fortunately.
No, thanks, Paula, and thank you for the question. Yes, so other assurance services are, is work where, because of the role the auditors play, there are things that logically they are best placed to support us with. On an ongoing basis, there's things like when we do a bond issue into the debt markets, and we need assurance work done by our auditors. That's the type of thing that would normally be in there. Clearly, for the last year, the big increase has been related to the rights issue.
Obviously, we, we've touched on a few times through the conversation this morning, and a lot of work that was required by Deloitte, our auditors, to support both the board, but also to provide shareholders and the advisors, the banks who underwrote the deal, the assurance they needed as well. That's what's caused the increase this year.
We've had a follow-up question in respect of GB Energy from Colin Greatorex.
Yes, can I be the first to say good afternoon? Paula, John, and Andy, you've all referred to working with the new government, which is good to hear, U.K. government. But as regards to GB Energy, there's been no mention of it. So I just wondered whether you had any discussions. John, you referred to speaking to Ed Miliband and Rachel Reeves previously. Has there been any discussion about GB Energy before it was created or thought of? And, you know, have you done a SWOT analysis in terms of how it might operate in relation to National Grid?
I'll just take it, I think. You know, it's been on the table for quite a long time, and really throughout its. it had many different ideas at the beginning, and John has advised government, you know, about pros and cons. I don't think that we feel that this is... The idea of GB Energy will probably continue to evolve. I don't think that we feel that it's at a point that it has, that we simply want to cooperate with where government wants to go. It's a bit of a, it's sort of an additive for them to have, a little bit more lean in to the investments that might be made to help further the energy transition.
But I don't think at this point, with the amount of budget that it's looking to be allocated or the first steps that they've taken, that it kind of rises to a major issue for us. It's government's plan, and, you know, we're all entitled to our plan. So I think we're also mindful of our role, which is we have plenty to do of our own. We're trying to get about it, and we want to cooperate and advise, but it doesn't really seem to rise to a level of a major strategic issue from our perspective.
Okay, so I'll ask the question another, another way. You don't see any conflict in intentions and-
No, I think actually it may well be that there are probably investors out there who say, "I want to" investors in, for example, alternative technology, batteries, storage. I would really like to understand in detail exactly how much the government is intending to put to this and what its priorities are. And we think that that's a good discussion, and we think that there's gonna be a lot of openness around it. So, you know, looks like a good thing, and we'll sort of see how it goes.
Okay, thank you.
Thank you very much. So we now have three questions submitted online from Gordon Young, and I'll read all three because they kind of interrelate for, in terms of the answer. On page 13 of the Responsible Business Report, under fairness and affordability, you say: "In the UK, we've been vocal in our support for Strategic Spatial Energy Plan." Would this not mean looking at other ways to bring energy to where it is needed directly from offshore or overseas, rather than along a 10-mile stretch of highly ecologically sensitive coastline? Question two: The principles of a fair, transparent document issued in May 2024 referred to in the Responsible Business Report, also on your website, has its first principle on page four: enhanced the natural environment and resilience of the land we own and work on.
Can you really say that these East Suffolk projects meet this principle? And finally, on page 14 of the same document, Principles for a Fair Transition, you speak of being committed to developing our nature strategy. Again, since for seven years you have stuck to an outdated plan for onshore cabling in East Suffolk, that will have huge environmental impact, what does this statement mean? Are these not just words?
Maybe I'll make just a comment. I think that this question echoes some of the strains of the discussion that has previously surfaced, and that there's nothing, I think, specifically we need to answer here other than to say that we are continuing to go through a very detailed process. We take it with great seriousness, we take all points of view, and we hope to reason together, and we just continue to be open to continuing the dialogue. And, JP, I don't know if anything else on your part.
No, the only thing I'd add is the reference to the Strategic Spatial Energy Plan is something that we are deeply involved in with government and with the system operator and the regulators. And that's very much looking very long-term about how does the UK deliver net zero, ultimately out to 2050. So that, you know, is one of the building blocks as you go beyond 2030 in the UK.
Thanks, John. So we're down to our final four questions. And we go to one in the room at Point B with Monica O'Brien.
Hello. My name is Monica Ann O'Brien. My title is Miss, and I am from Banbury in Oxfordshire. My question is: how can you, how can you predict how many more babies will be born and how many refugees and other folk will be on the island of Britain to meet the 2030 promised Labour, you know, Labour threshold? I don't know how, how you can do that, but also. Sorry, I haven't got my glasses on. Also, the high-speed project in Northamptonshire appears to have come to a halt, and therefore, public funds have been wasted on nothing, and all nature and habitat have been destroyed for nothing. And the other thing is, I'm all for innovation.
I've just resurrected my Swan slow cooker, and it's absolutely brilliant, the best thing since sliced loaf, and I'm all for innovation, and I congratulate you on taking the job you have taken, 'cause I don't know how anyone can get all the right answers, 'cause there are always more questions than answers. Thank you.
Well, thank you for that, I think, a bit of a wide range. You know, we don't have a crystal ball into the future. What we do is we do scenario analysis, so that we try to make sure that we're looking at a range of possibilities, and then we try to navigate reasonably within that range. You know, one of our challenges we talk about culturally, between the board and the management a lot, is how do you, on the one hand, be incredibly reliable, deliberate, organized, long-term, and yet be agile enough to change as conditions change? That is a real challenge for leadership, and that's part of what a board does, is help bring some outside perspectives in, you know, to help just give a little bit of extra look.
I would say that that's, that's our job, and we are honored and privileged to do it and, you know, so far, so good, but it is, it's a very complicated environment in which we work.
I think you do a sterling job, and I'm very pleased with my dividend.
Thank you, t han Thank you for your support.
So we have a follow-up question online from Richard Trevithick: Are we entering an arms race for power demand from the rising power demand from AI server farms at the same time as other rising demands to decarbonize domestic heating, transport, and industry? Should decarbonization needs be prioritized?
Well, isn't that the great question of the day?
It's a great question.
You wanna go?
Yeah. So thank you for the question, Richard. It is a fantastically topical question, actually, here in the U.K. and in the U.S., actually. And if you put it into context, if you look at the demand for electricity on the networks over the last decade, it hasn't increased, and it hasn't increased because effectively, the growth in demand you see through economic development has been offset by energy efficiency. But as we move forward, both in our networks in the U.K. and in the U.S., we are expecting to see significant load growth. And in fact, as a point of reference, we're having a discussion at the board tomorrow about this very topic.
And that load growth is coming from electrification of transport, from decarbonization of heat as people move from gas to heat pumps, and also, more recently, we have seen the emergence of significant large loads from data centers, particularly supporting generative A.I. At this stage, it's early in the phase, in the geographies that we operate within, but in the U.K., you would have seen in the media, there have been some announcements about big data centers being connected in the north of the country. The good news is, National Grid spends a huge amount of time on planning to make sure that we can respond to that and invest in the network to meet those loads.
There has been some discussion at government level, actually with the previous government, around potentially prioritizing certain strategic loads in the UK that the government may feel are, are more important, that can, can get connected more quickly. It'll be interesting to see how the new government takes that forward. So at the moment, there isn't a prioritization process other than National Grid has an obligation to connect anybody that wants to connect to the system, and obviously, we'll make the investment needed for that. But from our planning assumptions, we're assuming we will need to invest in the networks to support significant load growth for all the reasons I've just laid out.
Thanks, John. So, the penultimate question from Christian Donovan, which has been submitted online: How much of the business of the company is dependent on the UK? There's a number of questions here, sorry. Will the business consider that if the business environment in the UK becomes hostile, will the company consider options to move the business away from the UK? And the shareholder makes a comment at the end. He's insisting that all appointments at National Grid are solely focused on merit and merit alone.
You wanna go ahead?
Yeah. So in terms of the, I mean, the overall shape of the group, I mean, broadly, National Grid is 50/50, UK/US. Shareholders will recall that three years ago, National Grid did what we called a strategic pivot, where we shifted the shape of the group, moving more towards electricity and away from gas. By the end of this decade, we will be broadly 80% electricity, 20% gas, broadly 50/50 UK/US. We're very comfortable as a board that that's the right shape of the business. I'll just read the last bit of the question.
So there's a last bit of the question on, the shareholder wants to make sure that all appointments we make at National Grid are solely focused on merit and merit alone.
Well, I-
I was gonna say, let me take that one, you know, because I think that, it, in a way, I'm very respectful of the fact that, you know, we do have to take. Merit is essential to everything we do. We can't have people who are not performing in a way that is appropriate. But we also live in a world that is changing, and so we want to make sure that we're always changing with it. So that has to do with being diverse and inclusive, and we also champion those values, and we think that that mix of changing with the changing world is what is our strength.
Thanks, Paula. Our final question today is from Ruby Hazard: What is the percentage of solar, wind, gas, and coal and other energy that we are using? Are we on track to meet our targets?
Mm-hmm.
So I probably haven't got percentages for all of those, but if I give you a sort of reflection of last year. Then last year, the U.K., for the first time ever, had more electricity produced from wind than from gas. So 32% of all the electricity in the U.K. last year came from wind, 31% came from gas. Nuclear is typically around sort of 15%. Solar is very low, single-digit numbers. So in terms of are we on track, well, that's basically been the conversation we've been having today. You know, National Grid is setting out what it needs to do over the next five years to invest in the network.
There's a lot that others have to do in terms of policy, regulation, supply chain, to actually ultimately decarbonize the economy, but we've certainly set out what we intend to do.
Mm-hmm.
And thank you very much for all your questions, both in the audience, present, and online and pre-submitted before the meeting. As there are no more questions, we'll move to the formal business of the meeting. We have the quorum of shareholders necessary here in the room and electronically on the virtual platform, so we can proceed with the formal business for this year's annual general meeting. The resolutions for today's meeting are set out in the 2024 notice of AGM. I propose we take them as read. Thank you to all those who've registered their votes in advance. As is our usual practice and as stated in the notice of meeting, voting on each of the resolutions will be by way of a poll.
On a poll, each ordinary shareholder present at the meeting is entitled to one vote for every ordinary share registered in his or her name, and each proxy holder or individual representing a corporate shareholder is entitled to one vote for each ordinary share which he or she represents. The poll will remain open for 15 minutes following the conclusion of the meeting. We've taken on board feedback from shareholders, and this year, for shareholders attending in person today, we will use paper poll cards to vote, rather than the electronic voting handsets. All shareholders, proxy, or corporate representatives present should have been given a poll card at registration, which details the resolutions being put to the meeting.
When the Chair declares the poll open, please fill in clearly the space marked "Full name of shareholder," and if you are voting as a proxy for the shareholder, fill in clearly the space marked "Full name of proxy" and complete the card as outlined. For those of you attending electronically, once the vote is declared open, please first click on the voting icon, which will appear on your navigation bar. This will allow you to cast your vote on each resolution. If you need any further guidance on how to cast your vote via the platform, then please refer to the instructions on the homepage or the user guide available on the Documents tab. I'm appointing Equiniti, the company's registrar, to act as scrutineers.
If you have any problems in the room or questions on the voting process, please raise your hand, and someone from Equiniti will come and assist you. If you've already cast a vote via a proxy, then you do not need to vote again. If you do choose to vote again today, your votes cast at this meeting will replace any proxy that you previously lodged. Turning now to the business of the meeting. Resolutions 1 to 19 inclusive are proposed as ordinary resolutions, and resolutions 20 to 23 inclusive are proposed as special resolutions. The Board is unanimously in favor of each resolution proposed and recommends that you vote in favor of all the resolutions. I'll now hand over to Paula to formally open the voting.
Thanks, Julian. The poll is now open and will remain open until 15 minutes after the conclusion of the meeting. A summary of the proxy votes cast in advance in the meeting will shortly appear on the screen. You know, these figures on the screen are preliminary, and they'll be reviewed by our registrars after the meeting. Can I have the first slide? As you can see, on the basis of the proxy votes lodged prior to the meeting, resolutions 1 to 8 have been passed. Second slide, please. As you can also see, on the basis of the proxy votes lodged prior to the meeting, resolutions 9 to 16 have been passed. And then there's a third slide, which is resolution 17 to 23, which you can see on the basis of proxy votes have also been passed.
So this concludes the business of our meeting, and I therefore declare the 2024 AGM closed. As a reminder, if you do have a proxy card, you have 15 more minutes to register your vote, and there are boxes at the back of the room where you can put your proxy card. Final results of the voting will be available on the website. It'll be announced in the stock exchanges as soon as possible. So with that, I want to thank you again for being here with us today and online, for your thoughtful questions and the dialogue that it inspires. And please make sure you, for those of you in the room, that you get a lunch to carry away at the end of the meeting. And don't forget to sign that proxy card if you are gonna be putting it in the box.
Thank you. Bye.