Well, good afternoon, everybody. It's great to see you all, and hopefully you all enjoyed the trip this morning to our Newtown Creek facility. It's good to see you all safely back straight away. Look, it's great, after three years of not being able to do these events, to be able to be back here again in the U.S., and do a face-to-face investor event. I'm really excited about what we're able to cover today, where we're gonna see and hear from Rudy and some of the other members of the team around, you know, the real progress that we're making across our New York jurisdiction. We're also gonna hear about some of the exciting opportunities we have in front of us as we look forward through the energy transition.
Up first, as I said, will be Rudolph Wynter, President of our business in New York. He's gonna talk about our operations right here in Brooklyn and across the state more broadly. Some of that will build on the key messages that we talked through at the Capital Markets Day in November back in London. He'll talk also about the opportunities we have in front of us across gas distribution and across our electric businesses, both distribution and transmission here in New York. Particularly around, you know, what makes up some of the GBP 10 billion of investment that we've set out through to 2026.
Of course, as we look at our businesses here in New York, we're also focused on how we turn up as a responsible business, and you'll hear from Rudy and the team about that ethos and how it flows through everything that we're looking to do, how we're showing up for our customers and our communities across the state, and how that's changing the dialogue that we're being able to have with our stakeholders here in New York as a result. Of course, that's important not just today, but as we look forward to the longer term and the opportunities in front of us, you know, to 26, but also beyond that.
With that in mind, in particular, Rudy will also be introducing Ben Wilson, our Chief Strategy and External Affairs Officer, who will talk about our recently launched clean energy vision, as we think about the hybrid future for our gas and electric networks at the heart of that transition to the clean energy future. As we said before, with the route to electrification of generation and transport, you know, this will really focus on that hard-to-address heat challenge and how we see, you know, the zero fossil free future being part of our step forward and addressing that challenge here in New York and across the northeast of the U.S. in a way that's both cheaper and also less disruptive for our customers.
Bryan Grimaldi will then discuss how that fossil free future is landing for our customers and communities, and how the stakeholders in New York are taking part in that debate. Bryan leads our corporate affairs team here in New York and is really well placed to give you a view of how that's landing and how some of our stakeholders are reacting and in taking part in the discussions. Of course, delivering that clean energy future requires more than just our regulated businesses here in New York. You know, energy is a complex ecosystem, and it requires transforming both the generation and some of the other aspects of the energy systems across the state. Cordi O'Hara is here today, our President of our National Grid Ventures business.
Cordi will talk about how our non-regulated businesses fit into that journey, how we see the changes across the wider energy ecosystem. She'll particularly focus on Long Island and using Long Island as an example of how we see that suite of options and opportunities in front of us, really helping step forward across New York as part of that energy transition. Then finally, we're gonna spend some time on maybe something which is a less familiar part of National Grid, National Grid Partners.
This was formed back in 2018, and it's our venture capital investments arm, established to find innovative, you know, technically challenging areas that are really helping disrupt the energy transition and really make sure that we, as National Grid, are well-placed to both invest, but also understand those and take part in that transition and really bring some of those opportunities back into the rest of the company. You're gonna hear about some of the examples that we're already deploying today within National Grid, including here in New York, and the real-life impacts these are having across our asset base today. Ultimately, of course, that's also about delivering more efficiently and effectively, and that's, as ever, one of the crucial things for National Grid as we continue to step forward and deliver for our customers across the group.
Everything that you hear about this afternoon only reinforces, you know, the great opportunities that we see in front of us across our electric and gas networks here in New York, but more broadly for the decades to come. Of course, this all feeds into the five-year framework that we set out last year, where with the intention to deliver GBP 30 billion-GBP 35 billion of investment through to FY 2026, driving 6%-8% compound asset growth over that timeframe, and also, of course, the underlying earnings CAGR of 5%-7% that we set out last year. This unprecedented investment is enabling us to maintain world-class reliability of our networks, and again, you'll hear more from Rudy on that.
Advance in the energy transition, as we've just set out, while continuing to deliver the efficiencies that our customers and our regulators demand of us, both here in New York and beyond. I think it's a really exciting time to be part of National Grid, particularly here in New York, to be, you know, helping take the state on that energy transition.
Welcome, everyone. Based on the smiles that I saw outside before when everybody had their orange vests on and hard hats, I take it you had a good visit, right? Good to hear. Welcome to New York and welcome to Brooklyn. As I said last night at dinner, we are very excited to tell you about the opportunities that we have in front of us, but probably more importantly, how we're delivering for our customers, how we're delivering for our stakeholders, how we're delivering for our shareholders each and every day here in the New York business. Why don't I start by giving you a little bit of a background, just level setting on the New York business, also level setting you on myself. I've been with the energy sector and with Grid for 34 years.
My anniversary was July eleventh, so last week was my thirty-fourth anniversary. I can tell you that there hasn't been a more exciting time in the sector or here at National Grid than where we are right now. We're at really the tip of the spear when you talk about delivering on the energy transition. If you look at the map behind me, we sit in a pretty unique position here in New York. In some parts of the state, I'm a gas distribution business only, right? Down in the lower part of the state. Other parts of the state, we're gas and electric combo business. In other parts of the state, I'm electric only, electric distribution and transmission only. We sit with the interesting view of what's needed to deliver a fair, equitable, and reliable energy transition, probably more so than any other utility in the state.
The other thing you'll see is New York State's about 52,000 sq mi. Our service territory is about 25,000 sq mi. We're really covering about half of the state. Our asset base, about $17 billion, investing about $2.5 billion on those networks and in that business every year. Probably more importantly, and most importantly, we have the privilege of serving just over four million customers across this state. Lastly, we employ just over eight thousand people. We're a large employer in the state.
I'm gonna talk about how we're utilizing that and thinking about workforce development and making sure the state and all the neighborhoods in this state and all the communities in this state move on that journey with us and prosper on that journey with us as well. Then finally, we're delivering on that rate-based growth that Andy talked about on the upper end of that range at 8% a year. While Brian's gonna talk about the demographics across the state, talk about building stock across the state, I just want to level set you when we talk about the New York business, there's the regulated footprint we're talking about here. Cordi's gonna be talking about the unregulated opportunities in New York State. All of them have one thing as the backdrop, and that thing is the environmental goals.
That thing is the progressive environmental goals we have in New York State with the Climate Leadership and Community Protection Act, the CLCPA. As you can see, the CLCPA has probably the most progressive climate mitigation goals of any state in the U.S. 2040, 100% zero carbon electricity. By 2040, reducing at least 85% below 1990 levels of greenhouse gas emissions. That's gonna require a great deal of investment. Big targets. You can see by 2050, the state's targeting about 10 GW of onshore wind. The state is targeting about 20 GW of offshore wind. You could see the solar, 20 GW of storage and an ambition of 100% zero-emission vehicles. This is a state that clearly wants to lead in that energy transition.
We will definitely playing a major role in helping the state on that energy transition. Every time we talk about the energy transition in National Grid, we always talk about it being a fair transition. We have to make sure it's affordable. We have to make sure no one gets left behind. We've seen this story play out before in other transitions, right? Telecommunications transitions. 2022, we still talk about some people not having broadband in New York State, right? We have to make sure the same thing doesn't happen on the energy transition. When we talk about that New York business, as I mentioned before, we are delivering on our operational priorities. We've hit our reliability goals 14 consecutive years in a row for our electric networks throughout New York State.
We've won awards at EEI for our storm performance across those territories as well in Upstate New York. We're delivering on our ROE, consistently achieving anywhere between 95%-99% of our allowed ROE in this business. As I alluded to before, some significant capital investment opportunities as we see that increasing, and that's driving the rate-based growth and the underlying operating profit growth as well. We're also very focused on managing our controllable costs and delivering on our contribution to the group-wide efficiency programs. I'll talk about that in a moment, as well. If you look at the drivers of the growth and the drivers of where we're spending, as Andy mentioned, in New York alone, over the next few years, we're targeting to spend GBP 10 billion.
Roughly $6 billion of that I'll be spending in the gas business and $4 billion across the electric part of the business, electric distribution and transmission. On the gas portion of the business, 80% of that are investments that are mandated for safety, mandated for reliability. Largest component of that is our leak-prone pipe program, where we target at-risk components of our network, usually older cast iron portions of the network, to proactively replace them. When we do that, it reduces greenhouse gas emissions by reducing methane emissions from those, potentially leaking pipes. Probably more importantly, and Ben will talk about this and Brian a little bit later, it also helps us future-proof that network. As I replace cast iron, putting in steel. Ben will talk about the importance of that as we think about blending other fuels into the network, that becomes very important.
On the electric distribution portion of the business, the large driver there is essentially hardening our assets, doing storm hardening. Remember, almost 80% of my assets are above ground in Upstate New York, right? We have to storm harden those. It's also driven by electrification. As more and more EVs come onto the network, I have to maintain a certain level of reliability on the network. As we integrate more onshore wind and onshore distributed energy resources and renewables, we have to ensure that the network maintains its reliability there as well. A lot of investments being driven in the electric distribution portion around integrating renewables, getting the network ready for EVs, and even deploying EV charging ports on our territory as well.
On transmission, a lot of the growth there is, quite frankly, around New York State's, I would say, unprecedented level of investment the state will be making in electric transmission. There's no way to hit those aggressive climate mitigation targets without large-scale renewables that are happening across the state. You can't integrate those large-scale renewables and change the power flows that we need, a lot more power, clean power flowing from upstate to downstate, without big investments in those transmission networks. We're playing a big role in that. In our regulated footprint, a couple of the key transmission projects we have coming up is our, what we call CLCPA Phase One project. That's something that the Public Service Commission just approved last week. That's a $700 million investment to upgrade transmission in Upstate New York.
By doing that, it also takes away some of the congestion and the bottlenecks that we have in Upstate New York on some existing renewables. It stops the curtailment of almost 1.5 gigawatts of existing renewables in Upstate New York, and at the same time, creates headroom to interconnect another 1.1 gigawatts of renewables in Upstate New York. That's a CLCPA Phase One project. We have a joint venture with the New York Power Authority called the Smart Path Connect project. That's a $1.2 billion transmission line. Also looking to unbottleneck some existing renewables and hydro assets in Upstate New York. We have a 50% stake in that. Then finally, we have CLCPA Phase One.
There's also a CLCPA Phase Two, and these are the network's improvements I have to make to help New York get to its 2040 goals that we've filed with the commission, but they haven't ruled on yet. That's about another $1.7 billion of transmission investments. When Cordi comes up, Cordy will be talking about some great opportunities NGV is also looking at when it comes to transmission investments in New York State. Looking forward, as I mentioned, the outcomes here are rate base growth of 8%, the underlying profit growth of 8% compounded annual growth rate a year. It's really driving growth through the strong investments I mentioned, driving efficiencies. New York's share of the group-wide efficiency targets is GBP 175 million.
We've already delivered GBP 45 million of that, largely through, in the near term, improving how we are bundling work, doing that more efficiently. That drives down overtime, drives down contractor spend. Largely also looking at our vendor spend and renegotiating some contracts, doing those in different ways. Finally, looking at our facilities footprint as well. Going after the rest of our target is largely pushing hard on those same three things, but I would layer in something else. We're layering in new digital tools, some of which you'll hear Lisa talk about from some companies that we've invested in. These digital tools allow us to look at work plans very differently. Instead of utilizing time as a basis, utilizing risk modeling as a basis, and that helps drive some savings for us as well.
Finally, driving innovation, and I've already alluded to this. You're gonna hear Lisa talk about National Grid Partners and some really interesting companies they're investing in. Not only are they investing in those companies, but we are utilizing those companies in the core business. Of Lisa's investments, they touch probably 60% of the assets I have in the core business. A great example of that is LineVision. LineVision is a company that makes grid-enhancing technologies. These are technologies I could put on the network that allows me to optimize the network, essentially putting more power through some of the same assets. You'll hear a lot more about that a little later from Lisa. The backdrop to all of this, and you heard Andy allude to it, was, yes, we are delivering on our operating performance, right?
We are delivering on our financial performance. We also want to make sure we're doing this as a responsible company, and that's at the heart of everything that we're doing. How do we deliver that fair and equitable transition across New York? We're delivering that by delivering for our customers, helping them through COVID. During the height of the COVID pandemic, we pulled back on some of our bad debt collections and kept some going on, particularly pulled back on some residential and maintained the business collections to help make sure New York comes out of this stronger than it went into it. We've invested over $100 million in energy efficiency programs across the state to help customers lower their usage and lower their bills as well.
Finally, a program that we have, which is a program that we've launched with NYSERDA, New York State Energy Research and Development Authority, called Solar for All. Solar for All is a program that gives low and moderate-income consumers of the state of New York the benefits of having solar without necessarily having solar on their roof, but it gives them the benefits of community solar. Stronger collaboration with stakeholders. We've really upped our game here. Brian's gonna talk about it specifically when it comes to the fossil-free vision. We've just really stepped up our game on stakeholder engagement across the state. We, like every other energy company, is thinking long and hard about what does environmental justice mean, and what does it mean for a progressive company, right? What does it look like?
We know what it looks like when a company gets in trouble, right? They write big checks to historically Black colleges or something like that, right? What does it look like before they get in trouble? How do they engage with these communities and talk about what can we do together? We did just that. We hosted an Equity in Energy Summit at the Brooklyn Marriott about a month and a half ago. We had 80 participants there, and they ranged from energy companies around the state, climate activists around the state, as well as community activists around the state, right? Because we brought everyone together to have a real dialogue and do the hard work. The hard work is how do we listen to each other? The hard work is how do we not talk past each other?
The hard work is how do we find some things that's common ground that we could work on together? I think we all came out of that day growing with some really great ideas that probably is better that we're implementing it than rather than just admiring some good ideas. We all walked away, I think, a little bit better that day. Then finally, working with our people to improve safety across the business, improve diversity and inclusion across the business, hiring and developing the workforce that we are going to need and others are going to need for that next net zero future. I'll talk a little bit about that a little bit later as well. Probably a great example of this coming to life is something we launched in New York called Project C. C roughly stands for community.
It was loosely based on something called the Cinderella Program that was here in downstate New York in the 1970s, 1980s, and 1990s. We had to reimagine it for this time, and what does the city and what does the state need now? We reimagined it. We launched it a year ago, September, with a day of service. We had 1,000 National Grid employees doing volunteering at 60 different locations across the state. Looking back over the last year, we've helped 6,000 small businesses with Project C, helped them get better and more efficient energy equipment in their businesses, helped them with sometimes some targeted economic development grants for them to grow. Very often, we partner with New York State and New York City on those grants.
As I talked about before, making sure we have a fair transition and getting the workforce ready for the future, we, working with some partners, upskilled 400 underprivileged young people here in New York City on new technologies as it relates to energy, whether it was heat pump installation and maintenance, weatherization, energy efficiency, getting them ready for those jobs that are going to grow in the future. Again, wanna make sure no community gets left behind during this transition. We've supported and partnered with 85 community groups. We've invested about $7 million of support across the state. The colleagues, my 8,000 colleagues here in New York, have volunteered 15,000 volunteer hours for various charities and organizations across the state. This is overwhelmingly positively received.
When I see Governor Hochul, as I see her probably every other week, she never says to me, "Rudy, great job on that new substation." Never happens. What she does say is, "I saw your team out at XYZ location. Thank you for your leadership. Thank you for helping out." What she does say is, "I saw your team the week after the shooting at the Tops supermarket in Buffalo. I saw the National Grid team out there helping people with their energy bills, handing out food." That's what she sees. That's what she hears. That's what makes its way back to me. This is extremely well-received, and we plan on expanding it and going even deeper in the future. This is the build slide I always forget to keep clicking on. Delivering strong operating performance as I talked about, right? Our reliability is important.
Our storm performance is important. I mean, every storm event should be a non-event. I don't want our board, JP, the governor, or anyone else calling me. I want it to be a smooth event. That doesn't mean that we restore immediately, but it does mean we got really good at deploying resources during storms. It does mean we got really good at communicating with customers during storms. On our last storm that we had, 94% of customers communicated with us either via the web or via text messaging, right? A great way of taking out congestion from the call centers as well. It does mean delivering strong financial performance.
As I mentioned, New York business, delivered 99% of our allowed, delivering 8% rate base growth, delivering our underlying operating profit growth of 8%, as well. It also means significant growth opportunities that I talked about. Looking forward, whether it's on the gas networks part of the business or on the electric networks part of the business, we see some significant growth opportunities. We've upped our game across New York. I was invited to be with the Governor when she signed a bill into law allowing utilities to put networked geothermal in New York into their rate base, right? She signed that into law. Now we're identifying some pilots to make that move forward.
The increased engagement that we've had at the state level, at the city level, I know you had Deputy Mayor Joshi out there today, has gone a long way, and we see it paying dividends as we work with our partners in government, right, work with our partners who are regulators as well, to make sure we're delivering on that clean energy vision for our customers, but we also are making sure we do it affordably along that pathway as well.
It's great to see you all here this afternoon. I'm Ben Wilson. I'm the Chief Strategy and External Affairs Officer of National Grid. I've been in energy for 25 years. I joined National Grid last year, and I've got to say, I am super excited to be part of a business which is enabling the energy transition on such a massive scale on both sides of the Atlantic. Now, I'm gonna talk about our clean energy vision for decarbonizing heat, and it's really important that we have an energy vision for decarbonizing heat because heat is massive. Heat is massive in energy terms, and it's usually a light bulb moment for policymakers and stakeholders the first time they realize that fact. We've got a few stats on the screen here. On the left-hand side, we show where New York State's carbon emissions are coming from.
You can see the two biggest sources of emissions are the building sector, so heat, what we're talking about today, followed by transport. Electricity, the emissions from electricity is only about half the emissions from heat. Heat is a major contributor to carbon emissions in New York State. Natural gas, on the right-hand side, is the largest source of energy for the state of New York. That's for heating, and it's for power generation, and also for direct for industry. Heat is massive in energy terms. It is tough to decarbonize. That's why we need our clean energy vision. Another stat for you just to give you some context.
If we decarbonize heat 100% through electrification, we would turn the electricity grid in New York from summer peaking to winter peaking, and that winter peak would be double the current summer peak. That is the scale of heat in energy terms. Because of that, we need a balanced vision, and our vision rests on four pillars. The first pillar is energy efficiency. Now, Rudy mentioned the $100 million that we spend in New York on energy efficiency programs, and you saw in the video the potential for a one-third reduction in emissions just through energy efficiency alone. We do a lot of work offering advice, offering rebates to customers on energy efficiency. We will continue that. That is the best thing that we can all do to reduce emissions, is to improve efficiency. That's the first pillar.
The second pillar is we will convert the gas that we deliver through our networks here in New York and also Massachusetts to 100% fossil-free by 2050 at the latest, sooner if we can. That'll be initially mostly renewable natural gas, so methane, chemically identical to fossil natural gas, but produced from organic waste, and then increasingly over time, green hydrogen, so produced from the electrolysis of water using renewable electricity. That's the second pillar of the vision. The third pillar is what we call hybrid heating systems. For many customers, an air source heat pump or network geothermal will be a very good option. But that may struggle on the coldest days of the year when the demands for heat are at their strongest. Of course, that's the same time for everybody, so it puts stress on the system as well.
A really good solution for a lot of customers will be a hybrid combination of a heat pump and a gas system, with the gas increasingly from renewable sources over time. The fourth pillar of the vision is targeted electrification and networked geothermal. There will be, as Rudy said, growth in the electrification of heat, and we will play our part in that, targeting the parts of the network where electrification or networked geothermal makes the most sense. It's a balanced vision resting across four pillars. What are the benefits of this? Well, firstly, it's lower cost. Our studies show that this hybrid clean energy vision will produce bills in 2040, which are about 15%-20% lower than an all-electric scenario, so it's cheaper. Secondly, we will leave no customer behind.
Anybody that wants to go all electric can, but in many cases, and Brian will talk about this a little bit later, in many cases, converting the housing stock will be extremely difficult, and the cost of doing so may be prohibitive for a lot of customers. We're talking upwards of $20,000 to convert the average household in New York or Massachusetts to electric heating. We provide a choice where that is not a realistic option. We leverage existing infrastructure. The gas network reliably delivers for millions of customers. We can repurpose that gas network safely and reliably to deliver zero carbon fuel. Because of that, it's more resilient and reliable. Today, we have two energy delivery systems. One of those, which is bigger than the other one, is underground, so storm resilient, and also has built-in storage.
If we had to go from two energy delivery systems to one energy delivery system to meet the net zero targets, if we have to do that's what we have to do. If there's a way to keep using two energy delivery systems like we do today, that's a very attractive solution. Interestingly, I'll come back to this, our hybrid plan actually results in less gas use on a peak winter day than an all-electric scenario because of the requirements for power generation, which will have to come from gas in an all-electric scenario. Rudy talked about our 8,000 employees. That's a lot of high-quality jobs, high-skilled jobs, and this vision will preserve more of those jobs for longer in this state.
For all these reasons, we think our vision is a more practical and achievable way to deliver net zero for New Yorkers and for the Northeast. How's it gonna play out? We've got a few stats on the screen here, taking us from 2025 through to 2050. You'll see the percentage of fossil-free gas grows over time. Our vision is conservative. We don't want to overpromise here. We're starting at 2% fossil-free gas in the next few years, rising to 10% by the end of the decade, then to about a third by 2040, and reaching 100% by 2050. On the hydrogen side, we're starting small. Today, we're blending in a small way on Point Look-In on Long Island, hydrogen into the gas network.
We'll do more of those neighborhood demonstrations, building up to community scale projects by the end of this decade. In the 2030s, we're really moving up to the blend wall across the network, so up to the 20% by volume across the network, and increasingly, pockets of the network will be up to the 100% hydrogen. In the 2040s, we'll see increasing levels of 100%, taking us to a blend of about 30% on average. Renewable natural gas, we can move more quickly because it is chemically the same as natural gas. A 10% blend by the end of the decade, 30%, and then everything that's not hydrogen, so 70% by 2050. Look at the customer count. Pillar four of the vision is targeted electrification and geothermal.
We still see the vast majority of customers staying on the gas network to take advantage of this hybrid solution, so 90% of our customers will still be connected to our network in 2050. An interesting thing happens to gas demand. Because of energy efficiency and because of the volume benefits of the hybrid solution, you'll see actually significant reductions in total gas demand. That's great for emissions. We see the gas network's stable customer numbers playing a key role in 2050, and in fact through to 2100 and beyond. Let's talk about where we're gonna get the green gas from. Firstly, let's start with RNG. Now, it's important to note that almost none of the fossil gas that we deliver today is produced in New York State or in Massachusetts.
It generally comes through the interstate pipeline system from the whole of the Eastern U.S. That's our catchment area, and we apply the same catchment area for renewable natural gas. This is a sector which is growing fast in the U.S. today. There are about 250 RNG facilities in North America right now and a further 110 under construction. About 100 TBTU of production currently. That is up by a factor of five over the last 10 years. Actually, most of that growth is in the last five years, a CAGR of about 35%. Today, mostly it is from landfill gas, so methane, when waste in landfill rots and decomposes.
The next largest sector is agricultural waste, manure, and then a small amount actually from wastewater and from food waste, such as Newtown Creek that you saw earlier today. The existing pipeline infrastructure can deliver those volumes because it is chemically the same as fossil gas, and there are RNG projects connected to the interstate pipeline system today. Actually, if you think that the alternative use to that RNG was burning it on site, either flaring it or perhaps using it for power generation, then using it in our networks is carbon neutral. Actually, if the alternative use was that methane was just gonna escape to the atmosphere as the organic matter decomposed, methane directly is a very potent greenhouse gas. In that scenario, RNG is actually carbon negative. Carbon neutral or carbon negative for RNG.
In volume terms, today, we are about 15% of the market for fossil gas in the Eastern US. The charts on the screen there, they show our estimate of the RNG resource potential in 2030 and in 2040. 100 TBTUs today, up 5 times over the last 10 years. We say up to 600 or so by 2030, up to 1,500 or so by 2040. On that basis, we need about the same market share in RNG that we have in natural gas today. We think it's a very realistic set of assumptions. To check on that, we've been out in the market, we've done a request for information.
We've had a really strong response to that RFI, and the market has actually come back, and they've said that there's appetite to supply us RNG on a two-three-year timeframe, which significantly exceeds what we need in our plan for 2025. Also some interest in supplying green hydrogen as well. It makes us feel really good about our near-term targets, and the market study makes us feel good about our long-term targets. Turning to hydrogen. Green hydrogen from electrolysis of water using renewable power. How much renewable power do we need? We will need, and this is the left-hand chart, for the hydrogen in our vision, about 70 TBTUs of green hydrogen. If we assume the other LDCs in the Northeast are doing the same thing, then in total, we'll need about 240 TBTUs of green hydrogen.
Now, Rudy talked about the build-out of offshore wind in New York, and we see in the region about 40 gigawatts of offshore wind by 2050. Some of that, offshore wind will be producing off-peak, and there'll be no electricity market for that offshore wind. If we assume 5% of that offshore wind can be used for green hydrogen, that gives us 21 TBTU. There will be additional offshore wind capacity required on top of that for us to produce the hydrogen we need. We estimate another 22 gigawatts required dedicated hydrogen production. That will give us the 240 TBTU that we need. National Grid is involved directly in offshore wind, and Cordia will talk more about that a little bit later.
You might think that 22 gigawatts is a lot of additional capacity, but it's actually less than what we will require if we go down the all-electric route, as I mentioned earlier. The chart on the right shows today in the New York interconnected area, we have 70 gigawatts of generation capacity. We're forecasting in our hybrid scenario, that will need to increase to about 208 gigawatts. A significant increase, clearly. Within that 208, 22 gigawatts dedicated to hydrogen. If we go down the all-electric route, we need 280 gigawatts 'cause we have to build to the peak. Whereas if we go down the hydrogen, the hybrid route, we can utilize the storage in the gas network, we don't have to build to the peak.
That difference between the two, 70 gigawatts, that's as much as the whole installed capacity in NYISO today. Heat is big in energy terms. There's no getting away from what needs to be built, but the hybrid strategy requires less additional generation. We started on this journey. If we look at it today, about 57% of people in the Northeast of the United States have gas-fired heating. Then the other big categories are oil, wood, 25% and 13%. 57% today. Our vision is that in 2050, still about 50% of customers will have gas heating, now powered from renewable gas. 75% of customers will also have a heat pump. It's a balanced vision, which allows for different ways for us to get to our destination. We can't achieve this by ourselves.
We need support from policymakers and regulators in New York and Massachusetts to help us realize this ambition. Because of that, we're engaging heavily, as Rudy mentioned, and I'll now hand over to Bryan Grimaldi, our head of corporate affairs here at New York, who will tell you about some of that work that we're doing. Thank you.
Good afternoon, everyone. I'm Bryan Grimaldi. I run the corporate affairs portfolio for Grid here in New York. I'm with the firm a little over a year, and I joined from the outside law firm, where I spent most of my career building relationships in the city and the state government, and engaging deeply in stakeholder engagement. When I look at my place in the company and my role in the energy transition, it's about storytelling, and it's about taking to the key stakeholders the proof points of our values and our vision and our commitment to the energy transition. Let's talk a little bit about that. Talk about our service territory. You heard from Rudy sort of the map of the service territory. To break it down for you, let's talk a little bit about the differences within the state of New York.
2.5 million gas customers throughout the state of New York, 50% of them in the KEDNY service territory, right? Brooklyn, Queens, and Staten Island. About another quarter, Upstate New York in NIMO territory, and the balance out on Long Island in KEDLI. The differences are very different. Taking Staten Island, for example. Of median income households, highest median income outside of Manhattan. By contrast, NIMO territory up in Syracuse, some of the highest child poverty rates in the state of large cities. The difference is our customers in different places in the state have different socioeconomic backgrounds, they have different energy needs, and we need to serve all of them. We need to bring all of them on the energy transition with us.
As we work through this, it's keeping that in mind, and it's keeping those solutions in front of the key stakeholders who have to deliver on the promises that they've made on climate change in the state. Let's talk a little bit about that. Affordability is key, and it's essential to our vision. As you heard from Ben, between 15%-20% lower heating costs via a hybrid option. To put it into context, when you blend these fuels, you know, when we did the analysis for the vision, we looked at all of the inputs, and we took the most conservative approach, because when we pitched it to stakeholders, we didn't want the challenge of making high assumptions. It's been incredibly well-received. The chart on the right here, we show the base case, right, the 4100,100% gas network today.
If you look at the full electrification scenario, you're looking at an incremental cost per household out in 2040 at about $1,000 incremental per household in 2021 dollars. The hybrid approach in the middle with the dual heat scenario showing a savings to our customers, which we believe is the more balanced approach. It's more practical, it's more pragmatic. We talk about practical approaches, talk about the Northeast and the building stock. We talk about what's possible to electrify and some of the challenges to get us there. To electrify every single household in the Northeast would require 9 million households to be converted by 2050. To put those numbers into context, that's roughly 6,500 households every week for the next 28 years. Think about that. Think about supply chain implications. Think about labor implications.
When you add on top of that land use concerns, pretty daunting. Now, we mentioned the decarb study that Don Chahbazlameh, who's with us today, was part of with Con Edison and the Mayor's Office of Sustainability. In the city of New York, in those dense urban areas, a high percentage of the building stock is very difficult to electrify. In New York, we believe that number to be almost 70% of the building stock. Again, land use considerations, dense population, older building stock, buildings built over 50 years ago. How do you deal with that? Well, one of the ways you deal with it is a hybrid approach through a decarbonized gas network. In Long Island, we believe the number of hard to electrify buildings approaches 40%.
Now for the rest of the state and in more rural areas, that number drops to 20% or lower. There, you know, in Upstate New York, in the Western Division, where we're the electric provider, targeted electrification is good. Downstate New York, in dense urban areas, this study shows us that a decarbonized gas network is the way to go. It's the more practical, pragmatic approach that we can sell to key stakeholders so they can fulfill on the promises that they made to their constituents. How are we gonna get there? Let's talk a little bit about advocacy. When we engage in New York and in Massachusetts and D.C., we talk to our key stakeholders. We're demonstrating thought leadership. We're taking Rudy and Andy and Cordy to events. We're hosting panels. We're putting them in the community.
We're taking our subject matter experts that talk about the science and the engineering behind solutions. You know, we are required to deliver safe and reliable and affordable energy to our customers. Now there are some that say, you know, there is a different way, except when you talk about the state climate law. State climate law lays out the goals, but it doesn't tell you how you're going to get there. When we talk about talking to our elected officials and our regulators, when we came up with the fossil free vision, it was important to bring them along with us. We set up meetings with the governor's office and talking to the Deputy Secretary for economic development and the Deputy Secretary for energy in the environment. We went in, we laid out the vision, and we expected that to be a very robust conversation.
They came to the table with the PSC chair, with the DEC commissioner and the head of NYSERDA, and that conversation continued several rounds. Ben joined us for them, 3, 4 iterations of it, and we took their feedback, incorporated it into the plan. On the regulatory side, National Grid participated in the Climate Action Council process for the draft scoping plan they published earlier this year. We went to 12 different hearings throughout the state. We provided live comments. We provided comments based on where we were. Comments that we provided in Buffalo were very different than what we did in Brooklyn. All putting out our fossil free vision, clearly telling the state there is a better way.
We submitted those comments in writing along with our joint utilities and have now written white papers on topics of interest, distributed generation, future of the gas network. James will make those available for you later today. We talk about a little bit building coalitions. Coalitions are the most important asset we have today. Taking our partners in labor into the governor's office to talk about what's important in the gas network, it's what kept the gas ban out of the state budget. It's what further kept it out of the legislative session. Now there's a healthy conversation about hybrid heating in the State House, and we expect those conversations to continue. Transforming our media strategy. We've become storytellers, and we're doing it at the local, the regional, and the national level. We're being proactive about our plan.
We're being proactive about everything around our business. We're in the community. We're talking at community events. We are publishing. We are writing op-eds. We're getting our partners to come along with us in the journey. Rudy mentioned community interest in Project C, defining our volunteer programs, putting our SMEs and our colleagues in the community, amping up our workforce development initiatives, working with the state and local governments on programs that are important to them in developing that workforce of the future. I mentioned our union coalition. Our union coalition is not just the unions that employ National Grid colleagues. It's what we'll call tangential unions. If you think about steamfitters and pipefitters and building trades, they're all along with this journey, and they all support this vision. We also have built coalitions of customers who have come with us to tell that story.
This past weekend in the Times Union in Albany, we took a number of large C&I customers to explain what the gas network means for their fossil free vision future. That story was published on Saturday. Business groups throughout the state, the trade associations here are as vastly different as the customer base. The Long Island Association has a particular point of view on the energy needed for Long Island, the Buffalo Niagara Partnership, what's important to Western New York. Partnership for New York City. Most of the Fortune 500s invested in the city have board seats. Rudy joins them on that board. It's telling the story through the civic groups that are partners of National Grid in market. They employ thousands of people. They're well invested in the economic development of the state, and they want to get it right.
Bringing their voice along with us is important, as is the academic community, and using the academic community to help us tell the story, to validate our story of a fossil free vision. The assumptions behind it, why RNG is important, how hydrogen can integrate into it, and we look forward to more studies publishing before the end of the year. I thought it was important to give you an example of some of the quotes that we've assembled for people that support the plan. Kathryn Wylde, who runs the Partnership for New York City, Michael Cusick from the Assembly Energy Committee, Joe Borelli, Minority Leader of the New York City Council, and uncertain the president of one of our largest unions.
The interesting thing about this slide, the four people on it generally don't agree on anything, but they do agree that our fossil free plan is the way to go. Lastly, Ben mentioned the timeline. The interesting thing about the CLCPA is it tells us what we need to achieve. It doesn't tell us how to get there. We've now put out a plan with milestones on which we're willing to be held accountable. When you walk into a governor's office or the state legislative office building and you commit to something, they'll hold us to it, and they believe us because we do what we say we're going to do. When you look at the timeline and the vision that we put out there, it is achievable because those who are engaging in energy policy on Twitter don't have a plan.
Welcome back. My name is Cordy O'Hara, and I'm the President of National Grid Ventures. I've been in the industry 25 years, working on both sides of the pond, and nearly 9 years in National Grid. I can't tell you what an exciting time it is to be in the energy industry, and particularly in a company like National Grid. You've heard from Rudy earlier about the regulated business here in New York, and I'd now like to talk to you about the complementary activities that National Grid Ventures undertakes. Now, as you know, National Grid Ventures is the non-utility commercial arm of National Grid Group, and we're investing in energy transition assets both in the U.K. and here in the U.S., and specifically, in New York. In the U.K., we operate a world-class portfolio of electricity sub-sea interconnectors.
We just completed our fifth interconnector, the largest one in the world, 450 miles connecting Norway to the U.K., delivering 1.4 gigawatts of clean energy. While when we complete our sixth interconnector, the Viking Link, we will have a portfolio of eight gigawatts. That's enough to power eight million homes in the U.K. with clean energy. In the U.K., we also operate Europe's largest liquefied natural gas terminal, the Isle of Grain, in the southern part of the U.K., and that's a really important asset for U.K. security of supply. On a really cold winter, when we have peak demand on the networks, this facility can contribute up to 15% of that demand on the system. If I turn to the U.S., we've got a growing portfolio of generation assets.
In our onshore renewables business, National Grid Renewables, we have already put into work 1.3 gigawatts of installed capacity, and we have a growing development pipeline. Here in New York, we have 3.8 gigawatts of power generation on Long Island, and we have the potential for a further 3 gigawatts of offshore wind capacity through our joint venture with RWE. Alongside that, we also play an important role in competitive electricity transmission, and we develop electricity transmission lines that are both competitively bid and regulatory funded. You'll recognize this slide. Rudy talked to the very ambitious goals of New York State, and in particular, the requirement for abundant sources of clean electricity generation, both to meet key climate targets and also to serve growing demand.
That's specifically to meet the CLCPA requirements that 100% of the New York system will be a zero carbon electricity system by 2040. This is where National Grid Ventures plays a key role in New York. We are contributing directly to the delivery of these targets through major technology investments in the renewable generation categories you see there. Offshore wind, battery storage, clean dispatchable generation, hopefully fueled by hydrogen, and then clean transmission networks that are needed to connect and transport that energy from where it's produced to where it is used.
I'm hoping today, through this presentation, really to showcase the specific projects in NGV, the work against these new green technologies, and I'd also like to introduce how new clean energy hubs will evolve in the future and take Long Island as a specific case study where we are investing in multiple elements of these technologies. Let's start with our current generation portfolio on Long Island. Today, we really need the existing power generation which is fueled by oil and gas, to really keep the grid reliable. We own and operate 3.8 gigawatts of conventional generation, and that's all under long-term contracts with the Long Island Power Authority, and they're responsible for serving the customer load on the island.
To put the gigawatts into perspective, these plants provide about two-thirds of the firm capacity on Long Island. About half of Long Island's energy needs in the summer. On a hot summer day, a bit like today on your tour, you could expect Long Island to need 5.5 gigawatts, and you can expect our whole entire fleet to be operational. Today they are critical assets, keeping the lights on and keeping the air conditioning flowing. Now, as we know, the CLCPA will require these existing conventional generation units to be retired across the state, or they need to be repurposed with no carbon fuels. Now, in NGV, we're already really thinking about what needs to happen to transition away from these really reliable sources of fossil fuel supply today to no carbon fuels.
We've done some modeling, and we believe that of our 3.8 gigawatts of conventional generation, about half will be needed to get us to 2040. They'll be running during periods of high demand and also when there's low supply from renewables. We do see over time, each year towards that 2040 trajectory, running fewer and fewer operating hours as more offshore wind and onshore renewables comes online. The critical thing we're doing right now is working with LIPA on this transition, as well as really getting innovative around the use cases for repowering in the context of hydrogen. I'll speak a little bit to that when we touch on the hydrogen hub. Let's talk about the new joint venture partnerships and some of the projects that are already underway that are directly helping New York's decarbonization goals.
Firstly, NextEra is a joint venture. We've been working with them since 2015, really looking at New York's clean technology needs. Through that joint venture, we have deployed battery energy storage systems on the southeast of Long Island in places like East Hampton and Montauk. They're doing really important things for the system. They're accommodating increasing demand in peak summer days, and they're also providing grid stability. We've also been developing solar farms on Long Island, and we're just about to cut the ribbon, I hope, on our 23-megawatt facility in Calverton. That powers over 4,200 local homes and reduces carbon emissions by 20,000 metric tons per year. Probably the largest joint venture we have here in New York is with Community Offshore Wind.
As you know, in February, we recently won the right to lease the largest seabed area in the New York Bight area. You can actually see the map there, and the yellow centrally located nature of our lease. 125,000 acres and the potential to host up to three gigawatts of renewable electricity, which is enough to power over 1 million homes and businesses in New York. The next step with our joint venture is taking part in the New York solicitation process. NYSERDA is running a request for proposals to purchase clean offshore power. We're well underway with those proposals, which we will submit this fall. If we're successful in that RFP, then we can begin construction around 2028 and potentially reach commercial operation by 2030.
Thirdly, a really important joint venture is with New York Transco, and that's a partnership with the four New York utilities. It's really focused on having capacity to bid for competitive transmission. It complements the transmission work that Rudy does and provides another route for National Grid to participate. We're already been successful with the joint venture, and we are currently constructing the New York Energy Solution Project, which is in Upstate New York, and that's really providing an upgrade to the system that will unlock about a gigawatt of new renewable generation that's already been installed in the region.
In Long Island, the New York Independent System Operator has identified that additional network reinforcement and transmission will be needed, and that's because of the vast volumes of renewables, and particularly offshore wind, that we expect to connect to the island. Again, through our New York Transco venture, we have submitted proposals to compete for that work. We'll expect to hear more on those proposals earlier next year. The final piece of the puzzle in terms of what National Grid Ventures does here in New York is hydrogen. Hydrogen has so many potential uses that many people refer to it as the Swiss Army knife of decarbonization.
If you can bring the cost down, which we talked about in the earlier session, far enough and make enough of it, we can start using clean hydrogen to replace fossil fuels in all sorts of applications, residential heat, industrial processes, providing additional long-duration energy storage, and also evolving transport systems. Now last year, President Biden signed the Infrastructure Investment and Jobs Act into law, and the IIJA provides $8 billion of funding for the development of regional clean hydrogen hubs throughout the U.S., and that will be administered through the U.S. Department of Energy. Several states have already announced their intent to participate in regional hydrogen hubs. New York is no different. New York is already leading a process which is facilitated by NYSERDA.
National Grid Ventures' role is to lead the development of our group proposals aligned to the fossil free strategy that Ben outlined and aligned to the decarbonization potential of our fossil fuel assets here on Long Island. Now, the NYSERDA hydrogen hub is well underway. Over 50 partners have signed up to the hub, electrolyzer producers, other utilities, different sectors of demand that could use hydrogen application, commercial industrial users, transport. That hub is collaborating across four states, so it's New York, Massachusetts, New Jersey, and Connecticut. The intention being to put forward use cases that can demonstrate true scale to bring those costs down and create a really economic hub of the future. Where are we? We've submitted proposals as part of the funding process, and we're building out very detailed business cases.
Winners through the process will be selected in early 2023 for initial funding, and then ongoing funding is likely to be released over the next eight-12 years as those projects are built out. Hopefully, I've just given you a little bit of insight into the activities of National Grid Ventures, how they complement our New York regulated business, and how they demonstrate more broadly our commitment to New York's clean energy goals. They also have the potential to connect together into new clean energy hubs, and so we've basically taken a video from Long Island to show you a case study. Let's have a look at that.
National Grid has been embedded in communities in the northeastern U.S. as a reliable energy provider for decades. The changes we are making today are positioning communities to become clean energy capitals of tomorrow. One example of the clean energy hubs we're building in the northeast is on Long Island. Here is the work we are doing in solar, offshore wind, generation, clean hydrogen, battery storage, and transmission to help Long Island reach its potential as a clean energy hub. Today, Long Islanders are receiving clean energy from resources like National Grid and NextEra's 23-MW Calverton Solar Energy Center in Riverhead, New York. Calverton Solar powers over 4,200 local households and reduces carbon emissions by 20,000 metric tons per year, equivalent to removing 4,000 cars from the road. The New York Bight is a wide open space for opportunity.
Through Community Offshore Wind, a joint venture between National Grid and RWE Renewables, we will develop offshore wind infrastructure that will host 3 gigawatts of capacity, enough to power over 1 million homes and businesses. Today, we operate generation plants fueled by oil and gas. Tomorrow, we are exploring replacing some of that infrastructure to create power plants that run on green hydrogen made from renewable energy sources. This will be very valuable for areas with limited transmission connections that are powered entirely by local generation. Our goal is to provide clean, reliable power generation scaled to match the needs of the region. We believe hydrogen will play a larger role, not just in generation, but in creating clean heat. We will blend green hydrogen with renewable natural gas through our existing networks to provide cleaner building heat.
We are already building out one of the largest hydrogen blending projects in the northeast, and one of the first in the country, right on Long Island in Hempstead, New York. Today, we have deployed battery energy storage systems in East Hampton and Montauk. These systems are decreasing emissions and accommodating demand during the busy summers on the southeast end of Long Island. Battery storage solutions go hand in hand with renewable energy sources, so we can provide reliable energy to our customers at all hours of the day. More renewables require more transmission, and Long Island has limited transmission connections. Under New York Transco, a transmission venture partially owned by National Grid, we have a plan to modernize and upgrade the network on Long Island. This will improve reliability and resiliency while allowing the system to deliver more renewable energy.
Long Island is on its way to becoming a clean energy hub that can serve as an example for communities in the northeast and throughout the country. With renewable energy sources and new technologies working together, the region can drastically cut emissions and become an environmental haven for residents. National Grid is committed to creating a cleaner, fossil-free tomorrow, not only on Long Island, but throughout the northeast.
I hope you enjoyed that, and you can see how the components of the technology can really come together in local clean hubs. Finally, I did want to speak to our responsibility as a leading utility. You heard it from Rudy and how he approaches delivering infrastructure in the regulated business, and it's no different for National Grid Ventures. It's increasingly critical to recognize the significant impact new infrastructure has on communities, and the imperative to put them first in the clean energy transition. We agree that our projects should grow local economies, create new green jobs, contribute tax revenue, and really lift up the communities in the northeast. We know that we can use our clean energy projects to support workforce development and improve environmental justice in New York.
We've already started, and we recognize this approach is essential to our ongoing success. To conclude this section, I just wanted to leave you with three messages. Firstly, the work we do in National Grid Ventures is absolutely complementary to the regulators' business-regulated business. Our collective portfolio of clean energy investments carries a lot of weight in helping New York achieve its targets. Second, National Grid Ventures is creating options that can add to portfolio growth and clean energy leadership. What you've seen in the case study of Long Island is they're really uniquely positioned to understand the formation of integrated clean energy hubs, where renewable projects are working in tandem with the regulated networks. We are innovating today with real projects that will accelerate the clean energy transition.
Hello, everybody. Good to see you today. I'm Lisa Lambert, as Courtney mentioned. Thank you for that. I'm gonna talk to you about National Grid Partners. It's probably the group that you've heard the least about, in your tenure here covering our company. My job is to make sure you understand a little bit more about it today. Hopefully, you'll ask some questions as we go along. I joined National Grid back in January of 2018 with a mandate from our CEO to help National Grid future-proof its business. He's gonna actually add some commentary here in just a few moments 'cause we've got a cameo appearance by him on video on why he thought it was important for us to do that.
Our job, as investors and innovators, is to get ahead of the technology disruptions, help National Grid navigate those dangerous waters, and hopefully, when we arrive at our end state, that we've gotten there before everybody else and we're more effective than our competitors. That's what we're gonna talk about today. First, we're gonna have our CEO make a few comments about why we started the group, so I'll cue the video.
The words I used to the organization was: How do we future-proof National Grid so that we're as relevant in five or 10 years' time as we are today? We feel that we're at the heart of the energy sector in the U.K. where we operate and in the Northeast. That's where National Grid Partners effectively came from. I wanted to ensure that we had an organization that was connecting with new technology, with startups, effectively looking over the hill and then bringing that new technology back into National Grid.
Mm-hmm.
To allow us to adapt and to modify the way that we do things to meet the changing needs of our customers.
That's what National Grid Partners does. I have a compass depicted here on the slide because this is really our mandate, to be the guide and to help National Grid navigate the waters, to be the North Star, if you will, on how we go forward as technology disrupts every sector. Our guiding principles around the three Ds, decentralization, digitization, and decarbonization, so that is the megatrend, set of megatrends that we are following. The structure of the organization are designed to help us deliver on our mandate to be strategic to National Grid as we invest and innovate and to also produce a financial return. The four functions are as follows, investing. This is the one that may be a little more visible to you.
We announce all of our investments in technology companies, and so you probably have seen a press release or two over the last few years. We have two investing organizations. The first is our incubation and pathfinding function. They're based in San Francisco. When I joined National Grid, opened up two offices in Silicon Valley. The San Francisco office is housing our investments in seed and Series A stage companies, so very early-stage companies. These are companies that are on the bleeding edge, what's gonna be happening in the next five to 10 years. It's a small percentage of our portfolio, but an important percentage of it because it really is the guidepost to where the market is going. That's our incubation and pathfinding function. Then we have more traditional corporate venture capital, which you all, I'm sure, have heard of.
This is the group that focuses on strategic investments. We understand the strategic priorities of our business. We understand the use cases they're trying to solve problems or find solutions for, and we identify startup technologies that can be deployed to solve those problems. Really important part of what we do. Most of our investing is in the strategic category. The next function is business development. This is the group that is responsible for making sure that as we source companies in these priority areas, whether we invest in them or not, that they get visibility into the business unit. They end up getting deployed, piloted, or some sort of proof of concept to verify that the solution does solve a business case and should be considered for pilot. That's the business development team.
Our innovation team, this is the team that is responsible for developing our own creations based upon what we think priorities are within the business units. Think of it as our own internal incubator, where we line up with the business on priorities around decarbonization, around demand response, around energy efficiency. We ideate solutions, we then do design sprints, and then we do minimum viable products, prove the concept, and then hand that off to the business to scale up that opportunity. They become products, businesses within our operating businesses that are self-created. It really is an important capability, specifically focused on Horizon 3, which in the McKinsey vernacular is breakthrough technology, new business models, new markets. These are things that National Grid isn't doing today, but that we should be doing down the road.
We're developing these capabilities ourselves in this innovation function. Last but not least, Venture Acceleration is the group that I call the mind of the entrepreneur. You know, our goal is to bring entrepreneurial insights, best practices, you know, design thinking, lean startup methodology, and commerciality, right? Because they're competing in-market with incumbents, heavily funded incumbents and other startups, and so they really do need to have a business model that works. We've got a bunch of programs that we have launched within National Grid to help train the main body of employees on how to be more entrepreneurial, how to be more commercial. That's the fourth function. All right, just a quick pass-through of time. We officially announced National Grid Partners in November 2018.
I joined in January, as I mentioned, under the directive of John, as he outlined. We put together our first strategy. We did hundreds of meetings, roundtables, town halls, conversations with the employee base. One, to explain what NGP was. Certainly is not a traditional business unit within a utility or National Grid. So we explained what we were and how we expected to add value. We got much more insights on what the priorities are, what the problems were, whether those are operational problems or go-to-market problems or customer interface problems. We got an inventory of all of those problems, and then we began to invest. You can see our first five investments we actually announced in November of 2018, and we continued to make investments to support our mandate.
I'll talk a little bit more about investments, and we've got some cameo appearances, as I mentioned, from our CEOs. They'll tell you a little bit about them as well. We continued to add value, building up our business development capability, really getting close to the business to make sure that as we're investing in these companies, they're actually gonna add value, in the end. In the early part of 2019, we launched an initiative that we call the NextGrid Alliance. This is an alliance of right now 85 utilities. The beautiful thing about our sector is that we don't compete in market oftentimes, and so we can collaborate on projects, pilot ideas, work on working groups together, do workshops together. We're doing all of those things as a part of our effort and the NextGrid Alliance.
Very senior level people in all of these utilities, VP level and above. We've got a couple of our chairs of working groups here. Ben is chairing our innovation working group, and Cordy is chairing our net zero working group. Working with their peers on creative solutions to those topics. It's really innovative and I think a unique way of taking on the industry so we can accelerate the transition together. We began to work around the innovation COE in that Horizon three, as I mentioned. We had a couple of exits, our first two exits within the first 12 months of investing, and we've had four additional exits, as you can see on this chart. We began launching these innovation COE projects.
We've launched 9 of them now, and we began doing pilots of our Venture Accelerations group, so working in the US core business on these sprints and Venture Fellows group and secondments, all ways to get our employee base engaged in the startup ecosystem. We launched just about a year ago this advisory board, which is a board focused on the senior leaders in the company, making sure that as we bring innovations in and we bring new startups in, that they actually get deployed. They get funded for pilots, they get deployed, they get resources applied to them, lots of competition for resources. This is an important way to make sure that we continue to drive momentum into the business. Couple more exits, which I'll talk a lot more about in just a few slides, and then a focus around decarbonization.
We have an investment strategy that mirrors our Pathways initiative within the business, so that we're finding companies that meet the roadmap requirements and the criteria for delivering on that initiative. We've had a couple of more exits. Apogee was acquired by Cornerstone OnDemand, and AutoGrid has been announced to be acquired by Schneider Electric. That's a quick view of National Grid over the last 4.5 years. We have a financial audience here, so I assume we should talk a little bit about the numbers. This is a little view into the numbers. It's a $400 million fund. We have invested $345 million of that in 39 companies and six funds. We've got a lot of experience investing. We've got a lot of experience in the energy sector.
The combination of the two is really valuable. As I'm sure you've probably read, a number of CVCs fail because they don't do one or two or both of those things, and so really important to have the experience and the track record. The 44 investments includes the fund-to-fund investments that I mentioned, and we invest in funds because we want to get geographic reach. We've got a fund in the U.K., we've got a fund in Israel, we've got a couple of funds in the U.S. and one moving into Europe. It gives us geographic reach in places where we don't have a large team. We only have 48 people within this group, so it's a pretty small group compared to what you've seen today.
Most of our solutions have been either deployed, piloted, or in a proof of concept phase at National Grid, which is pretty remarkable. Only 25% of our portfolio is what I would call eyes and ears, right? Pathfinding. That's a huge accomplishment. We lead half of our deals, and you can see on the IRR basis, we are performing quite well financially. I've got more details that I'll talk about on that as well. Okay, TS Conductor. You know, I can get up and talk to you about all the portfolio companies, how amazing they are, and you know, the projects that we're working on, but I thought it'd be better to hear for a minute from each a few of our portfolio companies.
We actually even have Cordy and Rudy, they're gonna get up and talk a little bit about an actual case study of companies we have in the portfolio. I thought we'd start with TS Conductor. It's superconducting technology. The founder and CEO is Jason Huang. He's gonna talk to us just for one minute on what his company is, why it's important, and what impact it's having.
TS offers the most advanced conductor in the industry for our power grid. We can triple the throughput in the power grid with structures in the existing right-of-way and reduce line loss by up to half, while also improving grid reliability and resiliency. That is TS. National Grid is a visionary leader in the industry, and we're just privileged that they're looking at TS technology as a potential solution for their vision in terms of a clean energy future. National Grid Partners, they're extremely thorough. They do their due diligence. One of the, you know, probably most professional investment venture funds out there in the industry. I have been very impressed with everyone during that engagement.
When you look for investment, it's not just the money, it is also not just, okay, what they could do as a company. You work with people, and I have been thoroughly impressed with that team at National Grid, National Grid Partners. They are definitely the right people to work with.
I didn't pay him to say that. Wasn't that nice? A little view into some of the transmission technology that we are evaluating and investing in. This next one is right in our backyard. They're based in Buffalo. They are a heavy equipment EV company. They call themselves the green machine maker. We've actually purchased some of their product and we're gonna have Rudy talk a little bit about how that's going.
I mean, this is a really good example of impact, right? Viridi in Buffalo, two things I would say. We like what they do, we also like how they do it. I have about 400 pieces of construction equipment and construction vehicles across New York State. You heard before around New York State's drive and our ambitions to electrify transport. I can buy electric sedans and vehicles. It's much harder to get electrified construction equipment. We were the first customer of Viridi Parente, and we bought electric backhoes. To date, I purchased about 20 electric backhoes from them, got five more on order. They are filling a need that I have and that every other utility and construction company is going to have around electric construction equipment.
They essentially buy equipment and take out the diesel components and make it electrified. They put in batteries, et cetera. Very useful to us. We like what they do. We also like how they do it. Their facility is in East Buffalo, and they did not move from East Buffalo. Instead, they took over one of the many abandoned factories you'll see on the east side of Buffalo. They've renovated it, and then they hire people and train people from the community to work in their facility. They also support a workforce development initiative in East Buffalo called Northland, and we do as well. We've recently hired some people out of the Northland workforce development program, and that's where Viridi Parente is getting their workforce as well. It's big impact for my business.
It gives us reliable, electrified construction equipment, but also, you can see they are like-minded to us in how they contribute back to communities. Great example.
This is a company in our portfolio, another company in our portfolio helping us with the decarbonization agenda. All right, we have two more CEO cameos. This is Exodigo. They basically take pictures below the Earth, right? We can give visibility to our assets if there are damages that need to be addressed. We're gonna have the CEO, Jeremy Suard, talk a little bit about the company, how the technology is being used across the utility sector at National Grid. Just starting with National Grid. We just made this investment about two or three months ago. What the engagement will look like going forward with National Grid Partners and National Grid. We'll cue the video.
We provide underground maps, mainly for construction projects, where basically, if you map correctly at the design phase what's underneath, then you can design your entire project so that it's cheaper, takes less time, and way safer because construction crews are not gonna hit pipes. We work a lot with utilities, and National Grid is one of the big names out there that you know you have to work with as a big company that's very innovative. When we got in touch with National Grid Partners, they managed to connect us to the relevant business units in National Grid, and now we're starting working with National Grid, and that made kind of a trio alliance between us, National Grid, and National Grid Partners, for a key strategic partnership.
What we feel today after we worked with the team for a month or two is that they're with you in the trenches, they know exactly what they need to do to help you, and they work for you. That's something that we value a lot. Over the last month, we've got to know a lot of business units in National Grid and discovered that we have real value to bring to the company, and we are very certain that this opportunity is gonna turn into long-term relationship and business with National Grid. It all started with National Grid Partners.
All right, there's a little sampling on our portfolio CEOs. You can find a lot more about the portfolio and see these video testimonials from our CEOs on our website. If you'd like to do that, I welcome you to do that. All right, this is how we approach investing. Leads with the three mega trends is enabling technologies. We're not investing in IoT or in data analytics or in blockchain, but they're important enablers for delivering the solutions that our operating businesses require. The four investment categories that we focus on are, as described, customer. This is customer engagement, customer experience. This is energy efficiency, demand response. We've got companies in both of those categories.
Uniphore is a customer engagement experience company that we are doing a pilot with in our employee services group and evaluating for our call center. Demand response, Copper Labs is an example of that. They sit on a meter, and they assess how much activity and how much energy is being consumed on that meter, and then they provide counsel on how to manage peak and manage your consumption. We've got a number of companies in that customer sector, obviously very important for us as we're trying to add more value and be a differentiated satisfied provider of energy services. Modernizing assets and operations, this is all about efficiency, how do we do our business more efficiently.
We've got investments in capital management companies and asset management companies in project management for infrastructure projects, so companies like Copperleaf in the capital management space. They do analytics to help you make better decisions about what assets you're gonna invest in. Sitetracker in the project management space, they do critical asset or infrastructure project management. So those are examples there. Of course, Utility of the Future is all about electrifying and bringing RNG and bringing green hydrogen into our infrastructure. We've got some investments there aligned with our decarbonization strategy that I mentioned earlier. Smart Enterprise is about how we do what we do on a day-to-day basis more efficiently, more effectively. So consumerization of the enterprise, cybersecurity, how do we protect our flank so that we don't get attacked? How do we mitigate those risks?
How do we ensure privacy? Those are the four categories that we've been investing in, and I'll show you a slide of the portfolio in just a few moments, but every one of our portfolio companies fits into one of those four categories. Really important. There's the portfolio slide. Every single company fits into those categories, even the companies that we consider eyes and ears, because we believe there's next generation of technologies in those four categories. All right, so another case study for you, I've asked Corey to talk a little bit about Urbint. Cordi Capasso is the CEO there. They do predictive safety and damage prevention technology, and Corey worked with them when she was the COO of the gas business.
Thank you, Lisa, and this is a fantastic example of taking the innovation that National Grid Partners can source and bringing it into the business to solve real-world problems when you're operating a large gas utility. Obviously, as chief operating officer, you care about efficiently delivering the work on the ground, and you care about the safety and maintenance of your assets underground. One of the biggest risks you can face is actually a third-party damage to the pipes. Now, obviously, the traditional utility approach is to make sure there's a process by which you can understand work that's happening in the location of your assets. We have a ticketing program. People have to submit their proposals to us.
We go and map and mark out around the proposed construction activity where our assets exist, and we expect them to work safely within those markouts, and we expect them to always call us when they're going to do that work. Unfortunately, the reality means that not all those things happen. What you want to try and do is get to a place whereby you can better predict and understand where the riskiest work will take place, who are the worst offenders, and how can you get to them to prevent the damage. We started working with Urbint, who have AI technology. They have proprietary technology that allows you to update the historic damage rates on your network, update the permits that are being requested within each of the towns in which your assets are located.
Also update and understand how many tickets have been raised, and then they can predict the potential damage rate and the highest risk areas on your network to third-party damage. That allows you to then use your damage prevention inspectors in a much more targeted way. You avoid risk to your network, and you avoid costly rework when you have to make repairs to the network. We signed the contract back in 2019 across all of our gas networks, and we set a target of 20% damage reduction rate on the network. In the first year, 22%, in the second year, 24%. What's fantastic about the Urbint technology is it keeps learning. It keeps learning as the data is populated, and we get even better at targeting the worst offenders.
Just a great application for real-life management of risk on your gas network.
Excellent. Thank you for that. All right. Just a couple more slides here, but our last video is of a company that Hudson Gilmer founded, called LineVision. They're a dynamic line rating solution. They essentially help add capacity and resilience to your transmission network. They also create more of a safety kind of experience based upon their sensor technology. He's gonna tell you a little bit about the work that we're doing in New York, actually, with LineVision and our engagement expected going forward. Cue the video.
I'm Hudson Gilmer, co-founder and CEO of LineVision. LineVision is accelerating the transition to a net zero grid. We are helping our utility partners around the world harness the power of advanced sensors and analytics to increase the capacity, increase the flexibility, increase the safety of the electric power grid. National Grid really is a leader in the industry and with a deep commitment to net zero. That somewhat organically led to introductions to National Grid Partners. We did a number of background checks with some other early stage National Grid portfolio companies and really heard very positive things about the team that Lisa's built. Yeah, it's been a very positive experience for us. What National Grid Partners brings is not just a check.
They recognize that it is not easy for emerging companies like LineVision to navigate a large utility organization. They've got a team that is very helpful in making introductions to the right people, both in the regulated business in the US as well as in the UK. One of the other things that's really helpful for us is that they've created this NextGrid Alliance, which is leading utilities here in the US and around the world. That's just a great forum for sharing ideas, for introductions at senior C-suite levels to a number of utilities who have become customers of ours.
I think everybody just assumes that, you know, these startups get funded. The asset-heavy startups in particular have a difficult time getting funding. Many venture capital firms after the Cleantech 1.0 bubble burst back a few years ago, stepped away from venture investing in the energy sector altogether. What we do is really important, particularly if you're an asset-heavy solution like several of the ones that I've mentioned here today. It's difficult for them to get capital. We provide capital, enable them to deliver this value that you see is very apparent and, you know, moves us closer toward the clean energy transition. It really is important. All right, my last couple of slides. This is the money slide. All of the financial folks in the house will appreciate this one.
This is how we performed financially with our portfolio. We're adding all this strategic value, and I thought it was really important to show you that, but we're also delivering financial results. Our Cash- on-C ash for our first five investments was two-three times. Without details, but that's pretty good performance for a vintage 2018 fund. Our IRRs range between 25% and 150%, right? Which is also very good performance for a 2018 vintage fund. Most 2018 vintage funds are still deploying capital, right? They're not producing proceeds, and we're producing proceeds by big multiples. We've had up rounds in some of our larger investments. Recently, I could list another dozen up rounds that we've had, but these are some of the larger ones that are useful to point out.
Dragos is an industrial control cybersecurity solution, so they help protect assets from threats. Uniphore, I mentioned. Omnidian is a performance guarantee platform for distributed energy resources, so they make sure that your solar panels are doing what your solar panels are supposed to do, and they pay you if they don't perform. A more interesting data point is this one about unicorns. Unicorns are private companies, startups that have valuations of $1 billion or more. We've got five of them in our portfolio in just four years of investing. All of these companies we invested were at valuations between $50 million and $150 million when we invested. All of those companies listed have valuations in multiple billions now in just three-four years.
13%, 13.2% of our portfolio is unicorns, and it only took 39 investments to get them. If you look at that plotted on a chart, it is really impressive as compared to our peer group, and not just the corporates, but Venrock and Benchmark and Andreessen Horowitz, the big brand names that you see in the private sector. We get more unicorns with fewer investments, which is really an exceptional accomplishment. Then we've got our last couple of rows of what we think will be breakout performers, so 10x-plus type of performers. Then we've got the 3-5x expected returners. There's a lot more data that I could share on the financial, but I wanted to give you a glimpse into how we're performing.
We have to continue to perform well financially to justify our existence. You don't have a strategic investment if they don't have a good business model in the end, so that's important. All right, in summary, the International Energy Agency says that we need to invest a lot more capital than we are right now. We're on a $1.2 trillion run rate today. We need to get that up to $4 trillion by 2030 to achieve net zero by 2050. Investment capital is super important. Whether it's coming from VCs like us or whether it's coming from consortiums, like corporations who are investing increasingly in the sector, or whether it's coming from government, the investment is needed, so we provide a useful service.
Our belief is that we're gonna get there together faster, and the NextGrid Alliance, bringing you here, partnering with these startups, is all a part of that agenda. One of the other important points is just bringing the team together. I didn't show a timeline of our team and how long we've worked together. It's not just the four and a half years here. Many of us are recruited from places like Intel, where we worked together for many, many years. We've got chemistry, we've got the energy experience, we've got a track record, which does make a difference. I believe that we're gonna have a global impact.
We obviously want to impact in our markets, but I think we have the potential to go well beyond our markets and really accelerate the transition, which is why we're here.