Hooking up the new power sources to the grid

National Grid PLC chief executive Steve Holliday has acknowledged that connecting new nuclear power stations and offshore wind farms to the UK's electricity network would require over £1 billion a year additional investment from 2012 onwards.

The utility is already investing the majority of its planned £18 billion program to 2012 in the U.K.

"If you look at the plan for new nuclear and the offshore wind in the UK, you can easily see the need for a company like ours to have to invest well over another £1 billion a year in transmission in the period 2012 onwards," Holliday told Dow Jones Newswires. "So one of the things that we're talking to our investors about is that if you think of our business growing from £3 billion a year investment, from 2012 onwards that number is probably going to need to jump up."

The report highlighted that after 2012 the pressure will be on for the UK government to facilitate the construction of new transmission lines so they are ready in time for a planned first new nuclear power plant in 2017.

Recently, it was indicated that National Grid expects to spend between £5 billion and £9 billion - beyond the basic spending programme - over the next 20 years to hook up the new power sources to the grid. Much of this will go on bringing offshore wind farms onshore and managing the spikes and troughs of wind production.