National Grid Share Discussion Threads

[gucci] 07/4/2016 13:57

looks like a lot of us oldies from CEGB days here :-)

[neddo] 07/4/2016 13:23

pie,
got them at 20% discount , plus a bonus amount.plus free shares in all the the others , manweb etc

[pierre oreilly] 07/4/2016 10:45

That's about 120%pa income from that investment! More if ngc matched your buying in the sharesave scheme.

[neddo] 07/4/2016 10:28

me to uk, can't remember price , bought in the share save , not sure if it was 38p or 68 ?

[uknighted] 07/4/2016 10:14

Holding since the original privatisation. Great income share.

[garycook] 07/4/2016 10:09

Nice one.Sure keep long term.

[pierre oreilly] 07/4/2016 10:07

Income on that buy is now around 14%pa and hopefully growing.

[pierre oreilly] 07/4/2016 09:59

9/6/2010 for me, 3.35

I'm sure i'm making more by buy and hold rather than buying and selling every ten minutes.

[veryniceperson] 07/4/2016 09:21

Nice to have in a portfolio. Personally brought in at around 18 months ago.

[ridicule] 07/4/2016 09:13

£10 break through this morning!!! Broker forecast in one case £13 target and with impending Gas distribution sale this could well come about. My best investment by far.

[skinny] 30/3/2016 14:52

A new high @998.20p.

[neddo] 30/3/2016 11:44

well, is it going to break the £10 or do what it usually does from this price and head straight back down to the 9-40's ?

[deanforester] 06/3/2016 17:57

Thanks for that. SO I had guessed, but TO had me stumped. Acronyms are always a problem to the uninitiated.

[utyinv] 06/3/2016 16:46

Deanforester,

SO - system operator,

TO - Tranmission operator.

The SO is ultimately responsible for managing the System, ensuring Energy is despatched ie, Generation, use of inter connectors etc (instructed by ENCC control) to meet demand. They ensure the frequency and voltage profile strategy is adequate to meet demand.

They work very closely with the TO who include all those responsible for managing the National Grid Assets, ie, Engineers on site who maintain and ensure all equipment is working as required, the TNCC Control Room etc. ENCC Control Room (SO) work very closely with the TNCC Control Room (TO) where the TNCC control room carry out the switching (planned and post fault switching) for all National Grid Electricty assets. They ( TNCC), enable appropriate access to the system through Operational and Safety Management Switching and provide safety to allow people to work safely on National Grid's system and to provide safety from the NG system for 'Other Users' to safely access their system for work (DNO's GEN's etc).

All National Grid assets belong to the TO. The SO is primarily the two National Control Rooms ( both Electricity - ENCC and Gas - GNCC ) who control the energy on the system. The ENCC (SO) also control the Energy for Scotland.

All talk is about the SO for Electricity being hived off as an independent, non for profit entity to manage and ensure there is sufficient energy to meet demand. When gas is mentioned please differentiate between Transmission (GNCC) and Distribution (DNCC), as you know NG sold four Gas distribution networks a number of years ago ( for £4 billion) keeping four remaining lucrative networks (the Networks that have the most customers) which is being sold off by the end of the year (valued at £11 Billion). I hope this basic very holistic explanation is adequate?

[deanforester] 06/3/2016 10:48

Can you please define "SO" and "TO"?

[utyinv] 05/3/2016 12:12

Pierre, No, if less power is transmitted there will be an effect on use of system charges. However, a large proportion of cost is to connect to as well as use of the system and that is why new Generators need to think when evaluating whether or not to build. Take the analogy of a Car you build the car (P/Stn in this example) before you can use the car for transport you need to pay Road Tax for the upkeep of the road but before that there is another charge to get the car licensed to use the road (obviously related costs do not correlate but you get my meaning).

The SO will only get an incentive from OFGEM(which is capped for gain and loss, ie tens of millions incentive for operating the system the most effective and efficient way but if they do not perform they will be penalised tens of millions).

In the future, the SO which if split from NG will be independent from NG and it (SO)can call on energy sources which may be independent of NG. ie that is why new connections under the new competitive measures (planned to be implemented in the spring of 2017) will have to be open to tender. Where in the past NG would automatically build the infrastructure (S/Stn and connections)to accommodate the energy source, Siemens or A N Other can do this instead. They will then have to connect to existing structure (predominantly NG, just like telecoms Co's can connect and use BT systems), unless of course the energy can be embedded into a local demand. The SO will have to be impartial obviously.

Bear in mind that NG know the business better than anyone and they are not going to spend unless there is a gain. Currently NG is a monopoly and as such its earnings are capped by OFGEM telling the company how much it can earn and spend (which is ultimately paid by the customer). If NG can build using innovative efficient new methods they can keep a proportion of those profits whilst the customer benefits too. If the SO is hived off then the remaining NG will technically not be a monopoly, once other companies have infrastructure on the system that the SO can use. However, IMO that will take time and in the interim OFGEM will want to keep NG earnings reasonably under control whilst allowing infrastructure replacement and upgrades to existing and new system requirements.

In the future there may be a time where ministers will call for a break up of a dominating remaining NG but just as there have been calls for the big four banks to break up to allow more competition, those suggestions may be discounted as unnecessary (but depends on which political view is in power).

Demand Management, where the SO will agree a lucrative tariff with Users to be allowed to be switched off during low margin availability, that in turn will reduce the overall bill for the energy user. Demand management is an efficient way to keep the lights when there is insufficient power margin to ensure the robust integrity of the 'System'. If the SO calls on cheap interconnectors to provide power than expensive reserve power then they will be deemed to have acted correctly by saving consumers money and NG will get the benefit that the SO has used their asset.

Conflict of interest: Because NG have identified an increasing need for interconnectors in the future, the fact that NG have embarked on building them (joint ownership with the other connecting owner) shows that NG are ahead of the game!

If another Company would want to build an additional interconnector then they (Company) would have to evaluate the cost and the potential return especially taking into consideration that there are NG interconnectors already in use or being constructed. NG have cornered the market by being ahead of the game, knowing the business from an SO and TO perspective and because they have encompassed whole packages from build, commissioning and use, NG can undertake the construction of these future assets at very competitive prices.

[pierre oreilly] 05/3/2016 10:06

Uty, So is th income based on assets totally decoupled from the volume of transmitted electricity these days?

If say average demand fell by 50%, would the income based assets stay the same?

THat makes the view from the thinktanks/whoever that ngc have a (significant) conflict of interest regarding demand management even more bizarre

[utyinv] 05/3/2016 00:39

Pierre,

All electricity side income is based on volume of electricity delivered; yes you are right. However, the transmission charges are based on using the transmission system, entry and exit all owned by the TO or asset management business. The SO have an incentive to balance appropriately using demand control and correct use of Ancillary Services, ( primary and secondary response and correct Generation MVar despatch). But the money / income from doing a fantastic job in SO allowed by OFGEM is peanuts in the scheme of things.

The Assets are the income earners. Also the inter connectors fall under Asset Mgt TO not SO. There will be an increased reliance on a new Government Energy Policy, intrinsically utilising inter connectors with Europe.

The driver of the system is important (SO) and the Control Engs are well paid justifiably, but it's the Use of the Asset commonly referred to today as connection and use of System charges that bring in the money. If and only if the SO is hived off, the Assets which are the System will attract these revenues. SO will be paid an income for the efficient use and bear in mind SO will be a non profit making entity.

Btw, has anything come about the rumour that Grid were one of three interested in buying another multi utility (trans, Distn both Elect and Gas plus water???) in the US?

[pierre oreilly] 04/3/2016 23:23

As far as the grid is concerned, the average demand isn't a problem at all. The major problem is the peak demand. You can increase the average generation by a large degree with the same infrastructure.

[stevie blunder] 04/3/2016 12:17

HI gbb,
yes but if you run all the cars in the UK on electricity the average demand on the grid would soar. Think about it, you have to replace the energy currently provided by all the petrol and diesel. You are not on a winner, you are committing yourself to massive increase in generation and a huge rise in infrastructure capacity. Oh and all the generation has to be carbon free.

If you spend a few minutes on the numbers the answer is pretty scary.

[gbb483] 04/3/2016 10:16

1 - The peaks are the problem, get rid of them and you're onto a winner.

2 - Charging cars is a doddle, we brought in the solution over 30 years ago. It's called 'Economy 7', and I am on it.

[stevie blunder] 04/3/2016 08:51

Demand management can't lower the average consumption, or at least I don't see how, just take out the peaks. So it is useful but hardly transformatory.

Government policy to have us all driving electric cars, if successful, would be transformative! Imagine if every car on you street tried to charge up when they came home from work. The cables would melt under the roads! Where is the planning for that? There is none of course, because deep down nobody believes it will happen.

[pierre oreilly] 04/3/2016 05:38

Uty, but virtually all of the electricity side income is based on the volume of electricity delivered. Afaics the think tanks or whoever are saying ng aren't keen on cutting demand to match supply and would prefer to increase supply so they can match demand. My view is DM is fine and sensible when voluntary, but counterproductive when too much pressure is applied to large users to cut usage, especially at short notice. They are running businesses so there are obvious negative implications for them.

[pierre oreilly] 04/3/2016 05:25

The distinction between demand management and rationing seems to be taking a step closer.

[utyinv] 04/3/2016 00:16

M100,

Though Grid are advocating keeping the SO function (but ring fencing it like they ring fenced Dino and Fest pumped storage after Privatisation), I cannot see they would be financially devastated if it was hived off and sold. Of the £2.5billion profit NG make the SO element provides just £70million of that figure. The real value is in the Asset Mgt the TO business.