1. A National Grid Fit For The Future Chris J Murray. Newton Institute - 26 th May 2010

2. National Grid UK and US Electricity and Gas Transmission and Distribution England and Wales transmission owner National system operator

3. Our role is being redefined The energy world is changing – utilities playing a critical role in a sustainable future Today’s evolving market  Distributed generation  Energy efficiency  Infrastructure enhancement  Smart grid  Demand management  Wind sources  Solar sources  Clean technology  Energy storage Traditional energy market

4. Climate change is driving an energy revolution Sustainability Affordability Security of supply

5. Impact of UK generation closures on plant margin* * Margin refers to the difference between the total generation capacity and total demand.

6. Best view of new UK generation * Margin refers to the difference between the total generation capacity and total demand.

7. The changing generation mix

8. Existing / potential interconnectors Ireland Northern Ireland France Belgium Netherlands Norway France Existing Under construction Possible future

9. Offshore wind  390MW currently connected  8,806MW contracted for future connection  Developer information provided indicates 14.3GW of Offshore Renewables by end of 2020 More to do!

10. UK Strategic investment (electricity) Focus on Scotland Driven by onshore renewables Focus on East Coast Driven by offshore renewables / nuclear Focus on South & West Driven by nuclear/wind £4.7bn onshore investment identified

11. Where’s the UK’s gas coming from? 0 20 40 60 80 100 120 00/0102/0304/0506/0708/0910/1112/1314/1516/1718/1920/21 bcm / year UKCSNorwayLNGContinentDemand inc exports ActualForecast

12. UK gas transmission load related investment New Norway West of Shetland New continental link New southern basin developments Langeled Bacton Theddlethorpe Easington Teesside St Fergus Barrow Milford Haven Grain LNG recent construction future potential investment LNG importation Terminal existing network

13. Potential gas world……. Capacity far exceeds demand Will new storage be built? Norwegian UKCS LNG Continent How confident are we that the molecules will turn up? What investment is required for security of supply In 2020 - 80% of gas is imported and over 50% of electricity relies on gas

14. What does this mean for gas transmission? New Norway West of Shetland Langeled Bacton Theddlethorpe Easington Teesside St Fergus Barrow Milford Haven Grain LNG New southern basin developments New continental link Its not just electricity investment … Carbon Cap Storage Future investment Recent investment Terminal construction LNG importation Scotland Teesside Humber Liverpool Bay Cluster Region CO 2 volume Scotland18Mt Teesside11Mt Humber60Mt Liverpool Bay* 10Mt Thames28Mt Gas transportation Network flexibility becomes increasingly important

15. 2010 w Demand is a given w Second by second balancing achieved by flexing generation Future w Dynamic demand w Smart meters w Storage w Flexing generation 2010 w Major flows from UKCS & Norway Future w Less UKCS w Variable flows from Norway, European interconnectors & LNG Balancing the UK networks ElectricityGas

16. But… we have a skills gap to manage…

17. Our Challenges and Opportunities Developing future networks Decline of UKCS Transition to a low carbon economy 2020 EU Targets Thinking about 2050 Ageing Assets Security of supply Planning + Strategic Investment Changing economic climate Affordability

18. Thank you