Oil prices fall as the United States seeks a coordinated release of crude oil; A jump in the profits of the national network – Business Live | a job

[ad_1]

UK power lines Photo: Gareth Fuller/PA

Good morning, and welcome to our renewed coverage of the global economy, financial markets, the eurozone, and business.

National Grid raised its earnings forecast after reporting a jump in profits…. as submarine cables connecting Britain to other countries benefit from higher energy prices across Europe.

Profits before tax at National Grid, which manages energy infrastructure in the UK, jumped 86% in the first half of the financial year (to September 30), to 1.08 billion pounds, from 583 million pounds a year earlier.

The jump was partly driven by higher auction prices across its portfolio of Electric Interconnection, the high voltage cables that connect UK electricity systems to other countries.

The early operation of the world’s longest undersea electric cable between Britain and Norway could also boost the company’s fortunes, as well as improve UK energy security.

Photo: National Grid

National Grid bought Western Power Distribution, the UK’s largest electricity distribution network operator, for £7.8 billion, earlier this year, as part of a pivot away from gas and towards electricity.

This increased operating profit, as did the new IFA2 link of the National Grid (Interconnexion France-Angleterre 2) to France.

Electricity transmission revenues also increased.

City National Network said:

Excluding a first-time contribution of £257 million from Western Power Distribution (WPD), underlying operating profit was up 20% driven by the first six months of operations at IFA2, lower impact from COVID-19 compared to the previous year, and higher UK electricity net revenue. Transportation as we accelerate our investment in energy transition at the start of RIIO-T2.

[RIIO-T2 are the new set of network price controls set by regulator Ofgem].

Shareholders will see the benefits – National Grid now expects earnings per share to be “significantly” higher than previously thought, in part due to higher auction prices.

The new North Sea Link (NSL), which will be able to route up to 1.4 gigawatts of electricity between Norway and the UK, will also help:

Given a strong start to the year, we now expect to deliver basic full-year EPS well above the upper end of our 5-7% range. This is primarily due to the early operation of our new NSL interconnect, combined with higher auction prices across our group of interconnection companies, which are expected to generate around £100m higher operating profit.

Interconnector operators earn money through auctions, so when the price difference between two different markets is wide, the profits are higher.

But those same high prices hurt consumers and businesses who have seen their bills rise as energy suppliers struggle with record gas prices and rising electricity costs.

Yesterday, UK inflation hit a 10-year high at 4.2%, with rising energy costs being the biggest driving factor.

John Pettigrew, CEO of National Grid says:

In the UK we have made a strong start to the new RIIO-T2 period in electricity transmission, and we are preparing to submit our business plan to the WPD. In the US, we have completed a full pricing update via our distributors. At National Grid Ventures, we have commissioned North Sea Link, our new link to Norway.

While delivering this strong performance, we have completed our acquisition of WPD, launched the sale of a majority stake in National Grid Gas, and the sale of our Rhode Island business is on track to be completed by the end of our fiscal year, as we advance a strategic pivot toward higher electric growth, all of which made possible thanks to the commitment of our employees.

Looking ahead, the new organizational structure we have implemented, along with a major cost efficiency program, will ensure that we are in a strong position to take advantage of the significant growth opportunities ahead. Our focus will be to make critical and green investments to enable decarbonization of energy, transportation and heating, and to drive the transition of clean, equitable, and affordable energy across the jurisdictions we serve.”

Agenda 7am GMT: Eurozone new car registrations at 9:30am GMT: Weekly business insights and their impact on the UK economy report 1.30pm GMT: US weekly unemployment numbers 1.30pm GMT: Philadelphia Fed Manufacturing Index .

[ad_2]