Good morning, everyone, and a warm welcome to the 2025 Annual General Meeting of National Grid. I'm Paula Reynolds. I'm the Chair of the Board of National Grid, and thank you for joining us today at Warwick Conferences. This is our second year that we've done our meeting at the University of Warwick. Part of our thinking is that the National Grid Warwick campus is located nearby, and a substantial number of our employees are based here. Warwick's the home of our U.K. electricity transmission business and National Grid Ventures business. Holding our meeting here gives us an opportunity to invite some of our employees to join us in person and for the board to visit our various operations while they're here in the area. My thanks to those of you who made the journey today. I hope your logistics were reasonable.
As covered in the notice of meeting, today's AGM is a hybrid one, which allows for live engagement from everybody attending today, whether they're in person or over the internet. Besides those of you who are in the room, there are people who are watching this online. We'll cover the details of how you can participate in a moment. First, I'd like to introduce you to our board members who are with us in the room today. I'm joined on stage by John Pettigrew, our CEO, Andy Agg, our Chief Financial Officer, and Julian Baddeley, our Group Company Secretary. Also in attendance are all our non-executive directors, and I will ask each one of them to stand and turn towards you as I call their names. Ian Livingston, our Senior Independent Director and Chair of the Finance Committee. Iain Mackay, Chair of the Audit and Risk Committee.
Earl Shipp, who is just walking in with his cup of coffee. I'm so relieved to see him because I watched him leaving, and I'm very glad he's back. Chair of Safety and Sustainability, Martha Wyrsch, Chair of our Remuneration Committee. Jacqui Ferguson. Anne Robinson. Jonathan Silver. And Tony Wood. Let me just say for a moment, I couldn't be more pleased by the way this board has come together to work through the challenges with our leadership team and the amount of time and diligence that they bring to the tasks of being directors. I'll just offer a few brief remarks from the board, and then I'll pass the podium to John, who will share an overview of the business for these past 12 months. Then John, Andy, and I will take questions from shareholders about the business or the resolutions that are up for consideration.
There are a few questions that have been pre-registered. There perhaps will be a couple more that emerge through the internet, and we will capture those questions in the process. My hope is that we can be complete, and yet we can be expeditious so that we can move from the question period to the formal business of the meeting in good order. This is a historic AGM for National Grid. Not only are we commencing a historic capital program to rewire the infrastructure of the United Kingdom and similarly to enlarge our U.S. infrastructure, but this is also John Pettigrew's last AGM as our CEO. On May 1, we announced that John will retire later this year after 35 years of service. I know this is hard to believe because he is quite youthful looking.
John is only the second CEO of National Grid since it became a public company. This is a big change for us. For over 10 years now, we've been very wisely led by him. It is John who recognized that to meet the U.K. government's commitment to decarbonization, we should pivot into a wires and network company in this country. It's John who deepened our footprint in the U.K. with the acquisition of what is now National Grid ED, the largest power distributor in the country. It's also John who initiated programs such as Grid for Good, which is an umbrella for a variety of programs that offer employment support and assistance to communities that might otherwise be overlooked. His vision of the energy business and his generosity of spirit are both exemplary.
He's been a wonderful collaborator, an exceptional leader whose impact will be felt for years to come. John will remain in his role until the half-year financial results are announced and wrapped up. We are not going to say goodbye today. However, I will ask you for a round of applause in recognition of his leadership this time. To sort of complete the story here, on May 1, we also announced that Zoë Yujnovich would succeed John on November 17th, 2025. Although she does not officially join National Grid until September, and she will step onto the board at that time, she is in the room with us today. Zoë, would you please stand and be recognized? Zoë's had a career in energy and natural resources, so she comes as a subject matter expert in our industry.
She comes with a proven track record in delivering large-scale complex capital programs such as the very massive program that we have underway and ahead of us. There is a full transition plan in place for the handover, and the board is confident that our very committed and expert workforce, inspired by John's example and newly led by Zoë, will serve our shareholders, customers, and communities in an exemplary way in the times ahead. I now turn the podium to John to provide an update on our strategy and performance.
Feel quite emotional now. Thank you, Paula. Good morning, everyone. It is great to see so many here this morning, with others joining virtually, of course. I am pleased to be able to update you on what has been another exciting year for National Grid. As I spoke at last year's AGM, as Paula mentioned, we have continued to see unprecedented change across the world and in our industry, of course. As a consequence of ongoing geopolitical instability, national energy security is increasingly dominating political and industry debate as many countries restructure their energy policies to prioritize domestic energy production, meet increasing demand, and diversify supply. In the U.K., the government has set out a mission for clean power by 2030, aiming to achieve at least 95% zero-carbon energy by the end of the decade.
This ambitious plan is an important part of the government's growth agenda, and reaching these targets requires major reforms across energy planning, connections, and supply chains. In the U.S., we've seen a shift at the federal level from a focus on climate to economic development and national energy security. At the state level, there's an ongoing debate about how to best achieve the transition to cleaner energy. Regardless of political change and global uncertainty, resilient and reliable networks that are capable of meeting demand for secure, affordable, and cleaner energy are seen as essential. All this means that there's a lot to cover in my update for you today. Let me take a moment just to set out what I'd like to share. I'll start by updating you on our significant progress against the five-year plan that we set out last year.
I'll then provide an overview of our financial and operating performance over the last 12 months before moving on to our priorities for the year ahead. Last May, we announced our refined strategy, focusing our business on networks. We also set out a new five-year financial framework and our plans for GBP 60 billion of capital investment. This investment will drive asset growth of around 10% per annum and underlying earnings per share growth of 6%-8%, whilst delivering an inflation-protected dividend. Alongside this, we set out our comprehensive financing strategy, including our GBP 7 billion equity raise, which provided clarity on our funding to at least 2031. In the first year of our new strategy, we've accomplished a huge amount despite the turbulent economic and geopolitical environment I mentioned earlier. Let me talk you through some of the highlights.
Underlying operating profit was up 12% to GBP 5.4 billion, with good performance across all of our regulated businesses. This strong performance was underpinned by a record level of capital investment of GBP 9.8 billion, in line with our plan and 20% higher than last year. We've secured the supply chain and delivery mechanisms for more than 2/3 of our GBP 60 billion of capital investment, including 12 onshore and two offshore projects in the U.K. and the first phase of our $4 billion upstate upgrade in New York. The policy and regulatory agenda has also continued to move forward, further enhancing visibility in our investment plans. In the U.K., the government published its Clean Power Action Plan, and Ofgem published its decision to reform the connections process. Both of which will help to clarify the specific investments needed towards the end of the decade.
New legislation on planning reform has also been introduced, which will help to de-risk several of our major capital projects. In the U.S., we've refreshed all three of our New York Rate Plans and agreed new rates for our electricity distribution business in Massachusetts. Altogether, this means that we've now agreed over 70% of our U.S. investment with regulators over our five-year frame. It is the combination of this progress, together with the resilient business model we have, which means we're very well positioned and hugely confident in our ability to deliver the GBP 60 billion capital program. Turning now to our operating performance across the group, starting with U.K. electricity transmission.
Investment increased by 57% to GBP 3 billion, reflecting the ramp-up in the first wave of what we call our accelerated strategic transmission investments, or ASTI projects, major substation upgrades, and a further four GW of generation being connected to the network. The business delivered a return on equity of 8.3%, outperforming its allowed return by 100 basis points. On regulatory developments, in December, we submitted our GBP 35 billion RIIO-T3 business plan, representing the most significant investment in the U.K.'s electricity transmission network in a generation. Turning to U.K. electricity distribution, capital investment increased by 14% to GBP 1.4 billion, driven by increased spending on asset health, network reinforcement, and connecting nearly 600 MW of renewable generation. The business achieved a return on equity of 7.9%.
Whilst this reflects the benefits of our synergy savings program, it was heavily impacted by the costs from Storm Darragh, as well as lower-than-anticipated allowances for commodity price movements. We're working hard to address the ongoing headwind and expect performance to improve over the remainder of the price control period. Turning to the U.S., our investment in New York increased by 24% to GBP 3.3 billion. This reflects a further 218 mi of gas mains replacement and a continued ramp-up in the $4 billion upstate upgrade program, including strong progress on our Smart Path Connect project, where we're rebuilding over 100 mi of transmission lines. We achieved a return on equity of 8.7%, 94% of allowed, and 20 basis points higher than last year. On the regulatory front, we agreed a joint proposal in April for our new rates for Niagara Mohawk business, which includes an improved return on equity of 9.5%.
In New England, capital investment increased by 5% to GBP 1.8 billion, reflecting continued gas mains replacement, increased asset condition, and grid modernization work across the electric network. Our achieved return on equity was 9.1%, 92% of allowed, and 40 basis points higher than last year. On the regulatory front, in September, the DPU issued its rate case order for our Massachusetts electric business, approving a five-year plan with an allowed return of 9.35%. Finally, in National Grid Ventures, we've completed the sale of our renewables business in the U.S. and agreed a regulatory framework for our line-link interconnector project in the U.K.. As I said at the start, we've achieved significant progress in the last year as we continue to efficiently deliver secure, affordable, and cleaner networks for the future.
Before handing back to Paula, let me just take a moment to take you through our priorities for the coming year. I'll start with the U.S., where nearly half of our investment will be spent over the five-year frame. In New York, having reached a joint proposal for our Niagara Mohawk business, we'll continue to engage with the Public Service Commission ahead of an anticipated approval later this summer. We'll also continue to work closely with the New York administration on its state energy plan to develop a comprehensive roadmap to a clean and resilient future for our customers. In Massachusetts, we'll progress with key initiatives to enhance customer programs and integrated energy planning through our recently approved electric sector modernization plan. We'll be preparing our next rate filing for Massachusetts Gas, putting forward a plan that balances investment needs with customer affordability.
Finally, we'll be supporting our policymakers to understand the impacts and opportunities of increasing demand growth from data centers, and we'll work with federal policymakers as they begin to look at resource adequacy in the region. Moving to the U.K., in electricity transmission, our priority will be to continue to ramp up capital delivery, including commissioning two further circuits of our London Power Tunnels project. Our primary regulatory focus for the year is to reach agreement with Ofgem on an investable RIIO-T3 framework. At the start of July, we received Ofgem's draft determination and will now be engaging with them to ensure that the final decision in December reflects the needs of all our shareholders. We'll also be focused on supporting the National Energy System Operator with the recontracting of the connections queue.
Finally, following the incident at our North Hyde substation, which impacted Heathrow earlier this year, we welcomed the National Energy System Operator's report that was published this month and will work with the government and Ofgem on implementing the recommendations. In strategic infrastructure, our priority is to ramp up the ASTI program, where we'll be focused on stepping up work on the six Wave 1 projects that are now under construction, maintaining progress on Wave 2 with a total of eight consultations planned this year, and finalizing the procurement contracts for the remaining offshore projects. Once complete, we'll have secured Tier 1 supply contractors for all 17 of our ASTI projects. Moving on to our electricity distribution business, our priority is to complete on our targeted GBP 100 million synergy benefit and to deliver improved returns.
The coming months will also see us undertaking our largest-ever engagement exercise as we prepare for our real ED3 submission. Finally, turning to National Grid Ventures, our priorities are to agree the sale of Grain LNG, having launched the process at the end of April, and to continue the development of our line-link project in the U.K. and the Propel transmission project through our New York Transco joint venture. In summary, it has been another year of enormous progress. As you heard from Paula, this will be my last AGM following the announcement that I intend to retire from National Grid. I am delighted that the board has appointed Zoë as my successor. Having spent time with her over the last couple of months, I know she will be a fantastic CEO, and I am looking forward to working with her before handing over the reins in November.
It's been an immense honor for me to work with so many talented people over the years and to lead the company I joined as a graduate. I'm very proud that National Grid is leading the way to a new energy era, building the next generation of networks to deliver the energy needed to meet increasing demand. In a turbulent and unpredictable world, National Grid is a beacon of stability with an investment proposition that provides high-asset growth, strong earnings growth, and an inflation-protected dividend. In this context, we remain focused on delivering secure, affordable, and cleaner energy for our customers and providing long-term value and returns for our shareholders. As you hear, there's much to do in the coming months, and I remain fully focused on ensuring that we don't miss a beat so that I leave National Grid in the strongest possible position for its future success.
With that, I'll hand over to Paula.
Thank you. The Notice of Meeting, which includes an explanation of each of the resolutions being proposed today, was published on 29 May. We trust that you've had the opportunity to read it and consider how you wish to vote. The Notice of Meeting is also available under the Documents tab on the Lumi platform in case you're looking in online. Resolutions 1-22 inclusive are proposed as ordinary resolutions. Resolutions 23-26 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. With your permission, we'll take the notice as read. Thank you. A poll vote will be taken on all resolutions.
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 for each he or she represents. For shareholders attending in person, we will again be using the paper poll cards to vote. 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. I'm appointing Equiniti, the company registrar, to act as scrutineers. Now, with that all behind me, I will pass over to Julian, who'll take us through the voting process and how to ask questions.
Thank you, Paula, and good morning, everyone. As indicated by the Chair, voting today will be by poll.
If you are attending in person, please complete your poll form clearly marking your votes and place it in one of the ballot boxes as you leave. If you need any assistance, the Equiniti team is available at the shareholder inquiries desk in the foyer. If you are attending online, you can vote using the electronic system on the Lumi platform. The full list of resolutions will appear on your screen with for, against, and withheld options. Once you've made a selection, a vote received message will appear. You can return to the list of resolutions at any time by clicking the voting icon. If you've already submitted a proxy form and do not wish to change your vote, no further action is needed. However, if you would like to change your vote, please resubmit it using either the poll form or the Lumi platform.
In either case, please ensure you cast a vote for every 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. May I remind you that a vote withheld is not a vote in law and will not be counted. I'll now move on to the process for asking questions. For shareholders attending online, you can submit questions in relation to the business of the meeting through the LUMI platform. Click the messaging icon and type your question in the chat box at the top of the screen, then press the arrow icon on the right to submit. We will try to group questions by topic and alternate between questions in the room and those registered online.
If you are attending in person and have pre-registered your question, an usher will bring you a microphone at the appropriate time. If you have not registered a question but still wish to ask one, please simply raise your hand and a representative will assist you. To ensure we cover as many topics as possible, please keep your questions concise and relevant to the business of the meeting. When speaking, please stand and kindly state your name and whether you are attending as a shareholder, proxy, or corporate representative, and direct all questions to Paula in the first instance. If you have other general questions about the company but not related to the business of the meeting, please can you hold these until after the meeting has formally adjourned and speak to a member of the National Grid team.
If you're participating online and have general questions unrelated to the meeting, we reply to those after the meeting by email.
Thank you, Julian. The poll is now open for voting and will remain open until 15 minutes after the conclusion of the meeting. We're now going to move to the Q&A part of today's agenda. Julian, back to you.
Thank you. We're going to start today with a question in the room from Flora Tudhope.
Thank you. Hi there, Flora Tudhope from Guy's and St Thomas' Foundation. We're a health foundation and one of the largest endowments in the U.K. We're part of the Climate Action 100 group, engaging National Grid, and thank you very much for your engagement with the group thus far. I'm actually here today to ask a question just on behalf of Guy's and St Thomas' Foundation, which is really that.
Given the upcoming CEO transition in September, could you please share how the board plans to maintain momentum and further advance its goals on addressing and adapting to climate change, including how the new leadership will balance the need for renewable gas with energy security and affordability?
That we could go on for hours, perhaps, on part of that. Let me just say, as I mentioned in my opening remarks, that we have a robust transition plan that John and Zoë have come up with together around how matters will be handled in the interim, what will be handed over, and what in due course, and so on, so that we do not have any role confusion.
I think the second thing is when you think about what we have ahead of us to effectively rewire this country and substantially increase infrastructure in the U.S. as well, that is part of a very long-planned process. Being led by leaders who have been in place doing really enormous efforts to secure the fact that we can, in fact, deliver. Because I think, as John says, what is essential to this is that we must deliver as we have committed, and so that work goes on. I think with respect to the issues of climate, the role of gas, and so on, there are maybe two points I would make, which is that in the U.S., for example, there is a bit of a different view about the importance of gas than there is in the U.K.. Both societies agree that.
In one extent or another, that it's going to play a role as we move forward. We will have to adapt to the environments in which we operate, and our new leader will have to work with our team to make wise choices. I think the second thing I would say is that there's a piece of how we run the company that has to do with values, and we've been committed to a decarbonized future. We have been committed to an appropriate way in which we treat all individuals who work in our company and, in fact, everybody with whom we work. We are deeply concerned about making sure that we deliver in a way that we are promoting affordability rather than undercutting it. Those are our values. We have.
In securing Zoë to replace John, we've got somebody who comes in with an idea that they're going to embrace these values even as they have to navigate what is a somewhat ambiguous future in which we are all living and trying to make our way. I hope that is responsive to your question.
Thank you, Paula. Second question from the room from Laura Hillis.
Hi, everyone. Thank you for allowing me the chance to ask a question. I'm Laura from the Church of England Pensions Board. We're an investor in National Grid and a co-lead of the Climate Action 100+ engagement with the company. Firstly, I'd really like to thank the company for the really positive dialogue we have on climate-related financial issues and social issues. My question relates to community sentiment and the changing sentiment around net zero.
I know that National Grid has conducted really substantial engagement with communities that are being affected as part of the new infrastructure build-out required under the U.K. government's Clean Power 2030 plan. We're also aware that National Grid has made investment and funding available to communities as part of this process. At the same time, however, we're conscious that the narrative around net zero is becoming increasingly politicized and is shifting despite the huge benefits that we know net zero and decarbonization brings to communities in terms of cost of living and community well-being. My question is whether National Grid would be willing to provide greater transparency in its 2025 reporting on two issues. The first is more specificity around the types of feedback and the volume of feedback you're getting from communities and how the company is responding to that.
Secondly, how the company might be taking actions to address the shifting narrative, and particularly around countering misinformation about net zero. Thank you so much.
I guess that one's mine, or you would like to commit for us in the future. First of all, thanks for being here, Laura, and it's nice to meet you in person. I think that certainly within the responsible business portion of next year's report, we could put some color around the issue. I mean, we do not poll when we do community engagement, but I think we could certainly, and I look over at Carl Trowell, who runs our ASTI programs, whose teams are the ones that are doing the largest amount of interaction, although anytime we do infrastructure anywhere, we are engaged with communities.
He's got the lion's share of it right now that we could characterize what I think we would say is the duality, if you will, which is we enjoy large amounts of support for decarbonization as a public policy, but then we get into the detail of the fact that most of that power will be carried by overhead lines, and so there is a visual impact. We do quite a bit, and we could certainly elaborate further on the many tools that we use to try to work with communities to be comfortable with the way the infrastructure is being sited and what the community benefits would be. I think we could put some more color on that. With respect to this issue of combating misinformation, I think we like to think we are doing our best, but we are in a world in which misinformation.
Is rampant. We think that a big piece of what we do is not so much trying to have a big megaphone with the public because that's not practical, but to try to work supportively with policymakers around understanding from our perspective what the issues might be, how they can help clarify for the public what the trade-offs are, and so on. We work with all spectrums of the political world in terms of trying to educate. I do not know so much that we can really give you much more than an affirmation that we work across the whole political spectrum trying to be as factual as we can be.
Thank you.
We are now going to go to some online questions and pre-submitted questions before coming back to the room.
An online question we have received on behalf of Robert Thomas, why are you not investing in tidal energy?
I will put that one to you.
It is a very easy answer, actually. As you heard in my speech this morning, last year we refined the strategy for National Grid to focus on networks. The reason for that is it is where our strength and our capabilities are, but also where we have huge opportunities in terms of growth. Actually, we do not invest in tidal. In the U.K., we are not actually allowed to invest in tidal energy because we are precluded from investing in any form of generation. In the U.S., our focus is very much on networks as well. That is the reason. Our focus is on networks.
As Paula said, we have a fantastic five-year plan to invest GBP 60 billion across those networks over the next five years, which drives strong growth for our shareholders and stakeholders going forward.
Thanks, John. A second question from Mahinda Corp. There are three questions here, which I will read in order. How is National Grid working towards low-carbon renewable energy for the U.K.? As we are moving towards the use of electric vehicles in the U.K., how is National Grid working to help provide affordable supply of electricity in this area? This includes what medium-term investment is planned and being implemented, such as the infrastructure throughout the U.K. Thirdly, network grid capacity. Is this a challenge or serious issue in the next five years?
That one is right in your wheelhouse.
Yep. Let me just go back to the question, Julian, so I can see it.
I want to cover it all. Let me start by just saying, I think everyone recognizes that National Grid is at the heart of the energy transformations that are going on both in the U.K. and the U.S. The U.K. government has set out a very ambitious plan, the Clean Power Plan for 2030, which is going to require everybody to play their part, whether that's regulators, whether that's the government in terms of policy, whether it's the supply chain, or indeed National Grid. In terms of our role at the transmission level in the U.K., our real focus is delivering those major ASTI projects that I talked about, which will facilitate the delivery of energy. A lot of it being developed in the North Sea to where customers need it. On the electricity distribution side, we are very much focused on connecting EVs.
Last year, we connected 37,000 EV households to our network. That was a 25% increase on the previous year. We are going beyond that, actually. We are trying to make sure that it is an easy process for people who are buying an EV to be able to get the supply that they need to support that by adapting our website so that actually you can do it online in a matter of seconds to get that connection agreement. More broadly, in terms of electricity transmission, in terms of supporting the low-carbon renewable energy targets the government's got, in our price control that we just submitted to the regulator, we are looking to invest GBP 35 billion over a five-year period. That will double the amount of energy that can flow across our network. It will support 35 GW of additional generation, 19 GW of incremental demand.
A huge increase in the capacity of the network to support the renewables that are likely to connect to the U.K. over the next few years.
Thanks, John. We have three questions now on North Hyde and Heathrow, which I'll read in order and they interrelate. First question from Mark Haslit. According to the NESO report, the North Hyde substation fire was caused by the failure of the C-phase bushing on SGT3 and was exacerbated by the fact the fire suppression system was non-operational. No doubt many shareholders will be disappointed that a repair, which probably would have cost thousands of GBP, was deferred for several years. Whilst it's difficult to know an exact cost of a HV transformer, as they aren't exactly an item on Amazon, the cost is now somewhere into the millions range.
What assurances can the board provide that all relevant issues logs for similar high-cost assets have been reviewed and they will have appropriate replacement, repair, or mitigation prior to 2025 calendar year end and to prevent similar occurrence? That is the first. Second question is, following the incident at Heathrow, is the company doing a full review of the maintenance procedures? The third, which is on behalf of Caroline Brooks, is there any update on whether Heathrow will take legal action against National Grid, regarding the substation fire, which led to the airport being closed?
Maybe I'll start and then I'll turn it to you. Obviously, this was a catastrophic failure, and the board has been involved from the very news of the failure and briefed very thoroughly by the management. Very supportive of everything that's being done with respect to.
Independent investigations and, of course, cooperating with government on the investigations that they've undertaken and the reports that they're issuing. I will just make one clarifying comment about the way one of the questions was framed, and then I'll really turn it to John, who can provide much more color on the incident and the Heathrow relationship. And that's this, that there is nothing in what we learned and have been briefed on in this process as a board or what has come forth in the Independent System Operator's Report that leads us to believe that there was a deliberate deferral of maintenance. I think that that's quite important. John can explain a little bit about the systems that track maintenance, but had we actually had an active awareness of the fault that was later found in record-keeping, the maintenance would have not been deferred on this asset.
Because that is the nature of the failure, if you will, rather than anything that's implicated with respect to the way we take care of the health of our assets, as a board, we feel very comfortable that there's a very good process going on, and John will describe it. I think it's just very important to understand that this is not a case of a decision made to defer maintenance. With that, I'll turn it to you.
Thank you, Paula. I'm going to take some time, actually, because it's had such media attention. I think it's important people understand the context. I'll start by just saying that these are incredibly rare events. National Grid's transmission system has a reliability of 99.69%. It is world-class in terms of its reliability. A supergrid transformer failing is rare in itself.
The last time we had a failure that was operational was back in 2013, so 12 years ago. In my history of 35 years of being with the company, we have never lost an entire substation. It is an incredibly rare event. The context is quite important as well because there is what happened at the substation and what were the consequences. They were two different things. Just to give you the context, National Grid has three substations that feed the distribution system that feeds Heathrow. The fire that happened at North Hyde lost one of those substations, but we always had two other substations providing power into Heathrow. That is quite important context. You may have heard that in the media.
In terms of the site itself, the specifics of what happened was we had a failure on one of the bushings, which is a piece of equipment that allows electricity to travel safely through a transformer. Back in 2018, part of our routine maintenance, we do an oil sample to check for any moisture within the oil because that will degrade the insulation. We found that it was elevated. It was correctly captured in our systems, but unfortunately, there was a step that was missed that meant it did not become the asset managers and operational team did not get to hear about it or see it in the system, which meant that the maintenance was not scheduled. To Paula's point, it was not a deferred maintenance. Actually, the team was not aware that there was an issue.
Then subsequently, in March, when we had the event, the bushing failed, and the intensity of the fire meant not only did it take out the supergrid transformer, but it took out the one next to it and damaged some of the circuits to the third one. That was the facts of the event. As I said, an incredibly rare thing to have happened. Immediately following the incident, as you'd expect for a company like National Grid, we have taken a number of actions. First and foremost, we have ensured that any supergrid transformer on our system, or any bushing on our system that has an oil sample, that all the actions have been taken. That's already been done. We're also reviewing all the sites that have strategic demand in the U.K. linked to it. When I say strategic demand, I'm talking about things like airports.
To make sure whether they're connected to National Grid's system directly or indirectly through a distribution system, that the substations that support them are resilient. We're also reviewing our fire procedures at all our substations. Our fire procedures are legally compliant, but we want to look more holistically to see if there are broader risks that we've been missing. We have also appointed an independent engineer who's a risk expert to look at our risk processes. All of that is in hand. We're also working closely now with the National Energy System Operator, and we've been feeding into their report, and we fully support their recommendations. Of course, we'll work with Ofgem on their investigation. We've taken this very seriously, as you'd expect for a company. As I said, an incredibly rare event.
We've done all the short-term actions that you would expect, and we will work with the National Energy System Operator to make sure that we continue to deliver on those actions as well. There will be some broader learnings, not just for National Grid, but for national resilience around strategic demand as well. We'll be feeding our views into government on that issue as well. In terms of the final part of the question, which I think is a legal action, we do not believe there will be any legal action towards National Grid. As I said, we provided energy into Heathrow through three substations. We lost one to continue to be available to Heathrow. Also, Heathrow actually is not one of National Grid's customers. It's actually the distribution customer rather than a National Grid customer.
Thank you, John.
I have our final two questions, one pre-submitted and one currently in the room. The pre-submitted question has two parts, and it's submitted by Merover. To date, your company has not committed to using the nature reporting framework promoted by the TNFD, the Taskforce on Nature-related Financial Disclosures. Faced with the rapid erosion of biodiversity, we want to encourage the adoption of best practices in transparency so that companies report on their impacts, dependencies, risks, and opportunities related to nature. Could you give the reasons why your company has not signed up to this reporting framework? Could you make a commitment to shareholders to sign this initiative in the near future? Part two is, in addition, following on from this approach, have you considered adopting science-based targets such as SBTN, the Science- Based Targets for Nature, in the near term to materialize your ambition to preserve biodiversity?
If not, could you provide us with the reasons?
Maybe I'll just quick over you, then turn the detail to you, which is, let me just say, obviously, we take biodiversity very, very seriously. In everything we do where we disturb the environment, we have a commitment to make it better when we're done. The issue of there are many, many competing ways in which reporting can be done. It's a choice we make from time to time based on resources, how many of these various standards that we sign up to. It's thoughtfully done by our management and our Chief Sustainability Officer. We review the decisions, but it is ultimately management's choice about which of these standards it will actually sign up to. Those standards actually can live quite independently of the work we do. With that.
Yeah, thanks, Paula.
I mean, just to echo, we do treat this very seriously. Actually, we are very proud of what we do across National Grid when it comes to biodiversity and natural capital. If you look in our Responsible Business Charter and our Responsible Business Reports, you will see a host of actions that we have taken and commitments that we have made to improve the natural resources that we are responsible for. Just to bring that to life for you, within the U.K., we have about 1,700 hectares of non-operational land. We have committed to improve the environmental value of that land by 10% this year, and we achieved that at 10.1%. What does that mean? Because it is just a number. It is actually about repairing ancient woods. It is about planting wildflowers. It is about repairing hedgerows.
We focus very much on what we can do within that local community to make it a natural habitat that people can enjoy. In the U.S., slightly different. We have rights of way. It is all about preservation, actually, and making sure that we can get access to the equipment that we need to maintain reliability, but also taking responsibility to look after the habitat. We have some very clever sort of vegetation management processes that we use, again, making sure that we are planting the right types of vegetation so that we can deliver safe and secure energy to our customers, but also looking after the habitat that we are involved in as well. As I said, I would urge people to look at our Responsible Business Report. I think it provides an awful lot of information that would be useful for people.
Thank you, John.
The final question in the room. If anyone else has any questions, please raise your hand, and one of the team will come to assist. The final question in the room is from Alan Munday. Alan, over to you. Thank you.
Thank you, Alan Munday, individual shareholder. Given the earlier comments on the change in focus regarding climate change in the United States and the increasing turbulence of isolationist and regressive policies in the White House, is it not worth reducing National Grid investment in the United States and concentrating on its core U.K. business? Thank you.
I guess. Let me start. I think you will have your own thoughts, obviously, and Andy might even have some thoughts here. I mean, I think we all do. Thank you for your question. Thank you for being here to ask your question.
I guess I'd make a couple of observations before turning it to our colleagues. The first is that we live in a world in which political change is a constant for us. We've gone through changes of government in both countries. We go through changes of government at the local level, at councils, at cities and states. It is something that we pride ourselves on, our ability to adapt to circumstances. If we did not adapt to circumstances, I expect that we would not be the successful company that we are. We do have to take the long view about these matters. As an American, I can say that it's a very challenging time in our country. We are quite divided as a country. At the same time, we're united in the sense that we do believe that energy should be affordable.
That it should be resilient. Even under the rhetoric in the U.S., there is a strong intention that energy be clean in perhaps not quite the same way as the U.K.'s decarbonization ambitions, but nevertheless. We all want to have verdant and clean societies. We have to take that big view, I think. The issue of exiting a country is a very deep decision. It would be the same if there were a change in government here in this country that was extreme. Would we make the choice to exit a country? I think that would be a very major, very sober decision that had to be made, and that could not be made over a simple change in administration. It would have to be a confluence of many factors.
The last point I would make, and then John will have many thoughts, because over the years, there have been many questions about how many countries the company should operate in, and he would have huge historical perspective. The truth of it is that, notwithstanding the high-level rhetoric of national politics in any country, our businesses are essentially local businesses. It is an on-the-ground business. It is kilometer by kilometer, mile by mile. It is those relationships that are the ones that really determine whether we have a license to operate in a way that is consistent with our values. I think that at this point in time, as the board looks at this tumultuous world in which we live, we do believe that we have the license to operate in our various jurisdictions in a way that is consistent with our values and your interests as shareholders.
It's very comprehensive, Paula. I mean, the only things I would add to it would be. Of the GBP 60 billion that we've laid out over the next five years, nearly half of that is in the U.S. and is supported by the states that we operate within. They have their own ambitions in terms of climate change. Ultimately, National Grid's role is to meet the needs of our customers. It's our customers that are asking us to build this infrastructure to support their needs, whether it's to increase demand on data centers, whether it's to connect renewable generation, or whether it's to put an EV on the end of their house. When I talk to people in the U.S. and the U.K., the piece that's common is that everybody recognizes the importance of infrastructure. Sometimes people want to use climate as the main driver for that.
Sometimes it is about economic development. Sometimes it is about affordability. There are different drivers for it. Actually, what I see when I talk to people in the U.S. and in the U.K. is a recognition of how important infrastructure, transmission, and distribution is to enabling economies. As a result of that, just to echo what Paula said, I think it is incredibly important that we continue to do that investment because it creates a lot of value for our shareholders.
If there are no other questions, I would like to bring this Q&A session to—oh, we do have. Okay, we have one more question over here. There is a microphone coming to you.
Hello. Joanna Sitkovich, individual shareholder. My question is about GB Energy, the government's new GB Energy company.
Have you started discussions, and will there be any new business opportunities for National Grid beyond those that you would have already identified in your strategic planning prior to the general election last year?
Thank you for your question. I think it is very early days for GB Energy. We have met with the chair, the CEO. We have been to meetings. They have a lot of things that they are trying to think through right now, but it is really quite early days for them. I would say on our side, as we have said through the course of this conversation, we have our plate quite full with fulfilling what has been mandated that we provide. In addition, what we really did not mention, John alluded to, I think at one point, is we do invest in R&D, and that leads us into some new business opportunities.
Our R&D tends to be in the nature of technologies that are highly salutory of running our business better in the future. We have that going on. The fact, too, is that one thing does lead to another in this business. We have this big footprint. Technology is changing. Business circumstances are changing. I do not think that we feel any shortage right now of opportunities. Of course, we will be monitoring GB Energy as it gets more form and substance. Today, it has a very broad mandate and, in a sense, a bit of an uncertain funding to it that we will just have to wait and see which way it steers. Okay, with that, thank you for being here. Thank you for your questions, those of you in the room and online. Thank you so much for your interest and your support.
If you've not yet registered your vote, please do so because we do close the poll 15 minutes after the meeting concludes. A summary of the proxy votes cast in advance of the meeting is going to come up on the screen, I hope. There it is. Hopefully, you can read it. I have to say the monitor that's in front of me makes it almost impossible for me to see. I did see the numbers in advance on a piece of paper. Please note that the figures on the screens are preliminary figures, and they'll be reviewed by our registrars after the meeting. On the basis of the proxy votes lodged prior to the meeting, all resolutions have been passed, as shown on the slides. There's all three sets of resolutions. Final. Results of the voting will be available on the website.
It will be announced on the London and New York Stock Exchanges as soon as possible. Final reminder to those shareholders, proxies, and corporate representatives here in person, please put your completed and signed poll cards in one of the ballot boxes that you'll pass on your way out. With that, that concludes the business of this meeting, and I therefore declare the 2025 AGM closed. There is still coffee and tea out front available for all shareholders and guests to enjoy. A few of us will stay around if you have further questions. Once you're ready to leave, please return your wristband, and we'll recycle that. Again, we appreciate your continued support, your feedback, your interest, and for joining us in person and online today.