National Grid Share Discussion Threads

[losos] 21/1/2019 10:56

UtyINV - "I can see the 70’s coming back to the detriment of all"

Yes, the future looks bleak. On a slightly more positive note the DT has a story today about NG. investing in US start up technology and doing rather well (so far!)

Will we see NG. evolve into a multi-national conglomerate with operations in many countries ? (a bit like BA.)

My one over riding fear is a Corbyn government, maybe I'll be lucky and depart this world before that happens haha.

[jonnycash1] 18/1/2019 17:38

Indeed. Light water reactors are also very interesting. Companies such as NuScale Power are already in the game. Also amazing how much less power can now be utilised to run appliances and how the drive for efficiency is still going on. Uty - Interesting about BT, thanks for sharing.

[willoicc] 17/1/2019 14:53

Mini Nuclear power stations, like those used in submarines, are the way forward.

[utyinv] 17/1/2019 13:30

Samwn1,


You’re right it was the Miners strike that caused the 1974 power cuts. It was the NUM who wanted 20% pay increases that caused a standoff between NUM and Gov.

Years to follow resulted in the CEGB buying coal from the NCB at over 250% more than the true value of coal. That is why the CEGB under the Thatcher Gov decided to buy coal from overseas. The NUM priced themselves out of the market by ridiculous demands.

10-50% over the market price is understandable to keep jobs going in the U.K. but 250% is ridiculous. However, the BBC nor ITV at the time reported this news because it was deemed as too confidential. But this was tax payers money that many working In the industry priveledged to be aware of the situation were bound to remain silent.

If ever the industry gets Nationalised expect gigantic price increases to fund the investment void left by the exodus of private investors.

In addition the unions will be putting in demands of 10%+ pay rises. All this has to be paid for.

If everyone in the Country gets a 10% pay increase the man in the street is no better off, because as more money is put into circulation, inflation through massive price rises increase. That’s what the Left Wing fail to appreciate. The only real way to get wealthier is to work hard, study hard get promoted by showing competence or start your own business. Getting Unions to put in big pay demands only creates unrest in other industries that want their slice of the cake too, then retail, then Council workers etc etc so no one really benefits other than the egoistical Union Officials that are on the Gravy train.

I can see the 70’s coming back to the detriment of all and promoted by the ignorant.

[bountyhunter] 17/1/2019 12:26

We won't be arguing about transmission through the grid in future if there is insufficient electricity to transmit to meet future needs given the sorry state of the nuclear power station building program. A bit more wave/wind/solar power is unlikely to replace that in time.

[samwn1] 17/1/2019 12:22

The power cuts in the 70's were due to a temporary issue - the miners' strikes, once over, the coal started moving and the power stations switched on again. If OFGEM/UK GOV don't get this right it could be disastrous, there's no quick fix when you've got no spare capacity.

[shalder] 17/1/2019 10:04

UtyINV

Agree totally. There seems to be a prevalent view in political circles that key infrastructure and services such as energy and water should (if they are not nationalised) be operated on a not=for-profit basis, and that permitted returns should be calculated on that basis. What no one does is to ask the obvious question - if nobody is allowed to make a profit, where exactly does the money for investment in the future come from?

Since even the current government seems to go along with this view, the water regulator seems to be thinking similarly with cutting allowed costs of capital.

We may indeed have to go through a rerun of the 70's before sensible stategic decisions are possible in the UK.

[utyinv] 17/1/2019 09:27

Wylfa new nuclear power station work suspended by Hitachi, ie they are pulling out of the deal taking a hit of £2billion.

Sign of the times that OFGEM are making investments in Energy unviable

Culture change required IMO. Instead of designer clothes, holidays, new cars, new TVs and expensive nights out we have to get real in priorities. People should expect Mortgage, Food and Energy costs should be top of anyone’s budgets before spending on holidays etc. We are a very cold and damp country where we should expect energy costs to be a significant part of expenditure on household’s income.

Too much emphasis, too soon, on wind power. We need a diversified source of power generation and if it isn’t profitable to build and provide, Companies will just walk away.

Hitachi has done what many believe NG should have done with Hinkley. If OFGEM don’t get real they will ruin any more investment in our Energy business. Maybe the reality will kick home if and when there is a power cut and we have to do without. What a miserable life can be when things we take for granted is not there. Many do not remember or were not alive when we had power cuts in 1974.
We all take Energy for granted until it’s not there and OFGEM are sleepwalking into a dire future. IMO

[utyinv] 16/1/2019 14:54

Willoicc,

I know of Graphene, yes. Disruptive changes; only if you don’t embrace change positively.

[willoicc] 16/1/2019 13:58

utyINV

Have you heard of Graphene and the potential disruptive changes which may come about from its use?

[utyinv] 15/1/2019 22:32

Jonnycash1

Long term is a relative notion. I still think the asset base which is used in determining the regulated business’s allowed revenue by OFGEM will be with us for some time. Just as the rate rebate process adopted by the US business ( different processes), will see through a Generation or two but during that time do you think NG will stand still and not innovate, develop etc? NG has got its fingers in many pies to make the business viable.

In 40 years time it may have diversed its business model, hopefully. It’s the Job of the CEO to ask where is the growth coming from, what is the future and where will the revenue come from in 5, 10, 15 and 20 years time.

There have been significant advances in Engineering over the past 20 years but I honestly cannot say that what we have now wasn’t envisaged by great Engineers 20 years ago.

There are areas that have progressed exponentially like computers / IT and the manufacture of Chips etc. But other areas have been steady IMV

You quote BT. NG were in front of their time with regards to fibre optics (Energis). Unfortunately, Energis were scuppered by BT because although Ofcom stipulated to BT that they should accommodate competition by opening up access to their ‘cabinets̵7; that feed the customers , BT frustratingly ignored, delayed and lied to make it difficult for Energis to bring in to play a new technology that customers would pay for. Years later and after Energis were taken over (as apposed to folding) BT caught up and provided fibre optic technology for Broadband use but over 10 years after NG tried to exploit the technology.

So the Engineers at NG have good insight to provide income generating ideas using inovative ideas / technology but whether the CEO who decides on the investment strategy agrees or whether there are unfair hurdles imposed by unfair or injust practices can determine progress or lack of progress.

That’s what good regulation should be used for along with a forward thinking CEO.

Technology is no barrier to NG embracing new forms of revenue areas but the effectiveness of the CEO or unfair practices can. AIMO

[1carus] 15/1/2019 22:03

Jc1... I can see internet services by land based 5g not sure how they can do it by satellite...do you have a link to an article on that, just trying to get my head around the bandwidth issue. With regard to localised power generation I think that will become more common but maybe not in cities and large towns. It's difficult to erect wind capture and solar won't cut it alone for the vast majority, so I think within our life time the grid is here to stay. Plus I can't see how it can be ramped down. Also there is an efficiency in high voltage that is hard to replace. As for gas... which is much cheaper than electricity... its our primary heating source. I don't think you could generate that much energy here in the UK when you need to on a house by house basis, you certainly can't transport the gas other than using the pipeline.. the volumes are emense. But I whole heartedly agree that wind , solar and heat pumps can play a major part at reducing demand in many areas and add towards reducing our fossil fuel dependency. Not to mention the amount spent on wind generation that already plums into the grid. However, I would love to have on off grid house, but not everyone will be able to do that.

[bountyhunter] 15/1/2019 21:16

Electricity can't be distributed by satellite however and I don't believe we will all be generating our own even medium term anywhere near sufficiently to supply existing requirements plus recharge all those new electric vehicles which are anticipated. I'm quite confident that NG will have an increasing demand rather than a declining one for the foreseeable future.

[jonnycash1] 15/1/2019 19:50

Just a matter of time though...isn't it? Or do we have that technology already? We don't need electric trains anymore, who knew? We dont need the fibre optic cable the government has instructed must be put in nationwide, it can all be done by satellite, but money talks and BT had lots of money and lots of line rentals and employs lots of people. Anyway, as interest rate rises both sides of the pond are on hold, NG will enjoy a little bounce back for now. But a long term investment based on their asset base? Really?

[utyinv] 15/1/2019 08:13

Jonnycash1,

Yes you right in what you say. However if electric was 100% generated from renewables you will still need the wires to transport the juice to the demand unless we all generate sufficient in our homes to power everything we have that needs powering.
Gas needs to be piped to the demand points. If our own energy generation is used to heat as well (rather than using Gas), we will all need massive infrastructure in our homes to cope with such a demand. We had a great summer last summer but even after that we are generally a very cold damp countrythatneeds a lot of energy to heat, cook, light and power our modern lives.

They are even trying to chip away at doing away with wood burning stoves. Don’t know about you but we would dearly miss our stove😂

[jonnycash1] 14/1/2019 19:42

No offence taken, but I am not a troll! I think a lot of people fail to consider the impact of disruptive technology, which is inevitable. No point having electric cars when you are burning fossil fuels to generate the electricity, no point having an electricity distribution network in ten or more years if the world is looking ahead to the time we are all far less reliant on this type of setup. Self sufficiency will become the next big thing, the new aspiration of the people of the developed world. Energy is so interesting and there is so much that can be done already, the big oil majors cannot keep stifling and buying and squashing and denying it all forever. I merely encourage people to look outside the box. Hydrogen fuel cells are the tip of the iceberg. Look at maglev for instance. Secret of investing is being ahead of the game. Bon chance.

[newbank] 14/1/2019 17:35

NG fallen more today than any FTSE 100 Utility and it is the only Utility with a secure US business which is untouchable by the UK regulator and UK political scene.

CEO isn't really selling confidence in the great NG and this is reflected in the share price.

If you keep on capitulating to OFGEM, they will only come back to squeeze you more. Also, if you capitulate and are renowned for surrender others will take advantage. It's time the CEO earned his crust and got this share price back to where it should be ie £12 / share.

[1carus] 12/1/2019 23:46

Sorry jc1 if I offended in anyway, was not my intention.

[1carus] 12/1/2019 15:24

Jc1 this is a good place for informative discussion rather than trolling, unlike other threads I could mention. I am an engineer but haven't worked in the supply industry so am thankful over the years for some of the informed posters here. Tesla's tiles aren't going anywhere, it was some form of scam with a family member to write of some money... cant quite remember. But they are prohibitively expensive for the payback period. ... Toyota have a hydrogen car they sell in limited numbers here. Reverse electrolysis to drive the electric motors and water is the by product. I agree on the whole the energy solution and usage will get greener.

[jonnycash1] 12/1/2019 07:12

Great points above. Not exactly whst I was driving at but very useful anyway.
Ummmm...Tesla roof tiles? These roof tiles are all solar panels hxxps://www.teslarati.com/tesla-solar-roof-long-term-review-homeowner-insights-elon-musk-solar-tiles/
You may have heard of Hydrogen trains, already in operation. Plans now to run underwater trains! hxxp://fortune.com/2018/12/06/china-underwater-tunnel-high-speed-train/
The future of energy is changing fast. Will we need the same systems and infrastructure for our energy needs in the future? Will that leave NG. In a stronger or weaker position over the long term? Will it be easier for newer, smaller, innovative companies to deliver solutions more cost effectively in new ways?

[utyinv] 11/1/2019 20:59

1Carus,

Absolutely right but in NG’s case for the regulated business the asset base determines the amount of revenue OFGEM allows NG to make.

[1carus] 11/1/2019 15:49

Uty.. the type of stock that Ng has does have long term value, so I completly agree that writing something down over it's genuine life expectancy actually gives a truer value of ebitda and the value of the company assets. The companies I work for buy equipment that will last 10 years and write it down over 3. Makes your profits look good but your assets low. I guess it depends how you value you a company and what multiple you apply to the profits. Seems that the world overall likes profits more than assets.

[utyinv] 11/1/2019 15:15

That’s why Utilities used to be regarded as a safe stock with steady regular income. But you shouldn’t get Stella rises or falls like other stock. That’s why Corbyn wants to rob it from shareholders to fund his Left Wing policies just like Lenin did in Russia from 1917

[utyinv] 11/1/2019 15:07

1carus,

NG depreciation used to be based over 40 years same as the revenue that is pulled in by customers to pay for assets.

Unlike Tesla when NG build infrastructure or build a new connection / part of system they are allowed to recoup the cost through customers bills over a 40 year period. So in essence depreciation and increased asset value should keep pace with inflation. It’s only when there is an increase in asset base due to significant new demand needing additional system infrastructure or connection can the asset base outstrip the depreciating assets.

Years ago Cap ex was different to Op ex but then in RIIO 1 it was unified into Totex so the maintenance of existing assets to keep its value is also paid for by customers in a fashion. Interconnectors and other investment strategies like US infrastructure and Battery Storage and car charging points all build asset base.

If you recall 2006 ish there was a Rights issue where the Company had to go to shareholders to raise capital to fund capital projects because OFGEM said the increased asset base will benefit shareholders so shareholders must bear some of the pain.