National Grid boss warns of tighter energy supplies as profits slip in first half

Power transmission network National Grid has reported a seven per cent drop in first-half profit before tax, to £979m, reflecting "the temporary additional cost of pre-financing asset growth at attractive interest rates". The company says its on track for a good full year result, and that performance has been solid. (Release)

Head of National Grid Steve Holliday told Radio 4 this morning that UK energy supplies are "tighter than last year" but that there is "no panic". The chief executive, who said recently that the risk of blackouts this winter are greater than ever, hightlighed that 7.5 megawatts of energy were shut down last year while "a mere 700 of wind started up".

Operating profit fell one per cent to £1.6bn, in the six months ended 30 September, as a result of higher system implementation costs in the US and the expected end of Niagara Mohawk deferral income recoveries.

Holliday said that National Grid's UK business started well under the new eight-year price controls. In the US, he said, the company is "taking actions to improve internal processes and IT systems to support continued delivery of long-term profitable growth." It expects to invest "well over" £3bn to grow its asset base, and over 2013/14, it expects asset growth of around six per cent, in line with outlook for performance. Continued investment and driving growth will, he added, support the firm's commitment to "sustainable dividend growth."