Nerve energy networks go beyond the United Kingdom | Business

EEnergy providers may be at the forefront of the battle for public confidence in the industry, but it is the companies behind gas lines and electrical wires that have become the easiest political targets.

Network operators, including National Grid and UK Power Networks, are facing a violent political skirmish. The industry regulator has already reduced the yields it is allowed to generate at record levels. An even greater risk looming beyond the next general election, now that the Labor Party is committed to bringing the companies back under public control.

Business critics say that repression is an inevitable consequence of years of "inflating" households' energy bills while diverting billions of dividends for their international investment fund owners. They are selected, alongside the water companies and the rail operators, as proof of the failure of the British experience in privatization.

Companies are quick to point out that the prices they charge through their energy bills have dropped 17% since the liberalization of the sector in the 1990s, while private investment has reached about 100 billion pounds. sterling over this period. Renationalizing would mean less investment and higher bills, they say. But while their economic defense is turning a deaf ear, British energy infrastructure operators are becoming nervous.

John Pettigrew, chief executive of National Grid, warned that the British political landscape was raising growing concerns, especially among international investors in the company. "When I discuss with our investors abroad, what is important to them is a stable regulatory and political environment. The debate over state ownership is of growing concern to them, "he said.

Pettigrew joined National Grid as a graduate in 1990, just weeks after privatization. Nearly 30 years later, the holy grail of the free market is tarnished by a deep distrust of private investors and rogue capitalism.

Today, Pettigrew leads one of the most remarkable examples of British liberalization in the United Kingdom and the United States.

FTSE 100 is undertaking the same work as the United Kingdom with 9,000 km of US power transmission cables in five states in the north-east of the country. The United States is a market generating more revenue for the company than the United Kingdom, with fewer political risks and likely to attract the bulk of its future investments.

Pettigrew said earlier this year that National Grid was planning to increase its investments in its $ 3.5 billion (£ 2.9 billion) border market during the 2018-19 fiscal year. $ 5 billion. It already employs more than double the number of its employees in the United States and the United Kingdom, and expects its business to grow beyond gas lines and power lines.

Earlier this year, National Grid entered into a $ 100 million contract to acquire US renewable energy company Geronimo through its new Silicon Valley-based venture capital fund, National Grid Ventures. . The innovation branch now has a series of wind and solar farms and plans to fund new technology companies in the US with an initial investment of $ 250 million over two years.

The US market is a safe haven for National Grid investments that go beyond political upheaval. But it is also a market where Pettigrew can expect stronger growth and support from government officials to modernize the network and add charging points for electric vehicles.

An industry executive, who asked not to be named, said the big international investors were also looking to go elsewhere. "Investors are currently turning to the UK and asking if it's a good time to invest in a type of regulated utility in the UK," he said. "Investors consider two things: the opportunity and the environment. The UK's decision to create a net zero carbon economy is a huge opportunity, but the environment has given investors pause to think. "

Even investors who believe that a Labor government can pay a fair price for its badets in case of re-nationalization worry about draconian regulation and the threat of a Brexit without agreement: "The problem is that the need to invest in the energy sector now. "

UK government support for the construction of offshore wind turbines and electric vehicles will still require investments in towers, substations and power lines that connect renewable energy to homes and charging points, sources said. sector. The need to wean households from fossil fuels for domestic heating may require even more ambitious work to also recast the country's gas distribution networks.

"The most critical thing about zero net carbon is the speed of delivery – the last thing everyone should think about is to slow down this industry," warned the energy boss.