US electricity distribution workers repairing wires damaged in hurricane Irene

National Grid to beef up US assets against climate change

British energy company National Grid will invest into reinforcements of its US networks to make the system more resilient against severe weather.

According to National Grid’s CEO Steve Holliday, the company will invest some $2.5bn (£1.5bn) into its US assets, subject to an increasing number of heavy storms and other extreme weather events, such as floods or snow storm – a probable result of the ongoing climate change.

Over the past year, ice-storms besetting the USA have cost National Grid some £60m.

The company, which reported a 1 per cent rise in annual profit, also warned that its spare electricity production capacity in the UK would tighten again this winter as around 1,700 megawatts of power generation will be shut down.

"Nobody will ever guarantee the lights won't go off ... But everything being normal, we should be able to do our job and keep the system in balance over the course of the winter," Holliday said.

Britain is facing an electricity capacity crunch as unprofitable and polluting power plants are closed down, while new stations are slow to start operating.

National Grid is likely to start implementing a new mechanism this winter whereby contracted energy consumers reduce their demand at times of high pressure on the electricity system.

The company also announced on Thursday higher-than-expected earnings per share of 54 pence for the year ended March 31, benefiting from new regulated prices it charges for using its cables and pipelines.

"The outlook for National Grid remains strong and relatively low risk," said equity analysts at Liberum.

Shares in National Grid were trading 0.3 percent lower at 859 pence at 0828 GMT.

The company's full-year operating profit rose 1 per cent year-on-year to £3.66bn pounds and it said it had invested more than £3.4bn on improving its infrastructure assets.

The firm also said it expected to pay a full-year dividend of 42.03 pence a share, up 3 per cent on the previous year.

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