NGG - National Grid Faces New Challenges With Electrification Growth

2024-05-01 13:44:47 ET

Summary

• National Grid's infrastructure has not been substantially upgraded since the 1950s in the UK and over 100 years in Upstate NY.
• The UK's plans to upgrade the electrical grid with a £58 billion investment will likely add to National Grid's debt burden.
• The trend towards electrification, including the government's targets for zero-emission vehicles, poses challenges for National Grid's strained infrastructure.

Introduction

Utility companies have struggled recently, with the big players facing significant headwinds. National Grid plc (NGG) headquartered in the UK has managed to keep its share price more steady in these turbulent times.

The main reason for this decline is the volume of debt that utility companies carry on their balance sheets. National Grid is no different in this regard, with over £43 billion of outstanding debt. Although possibly an irrelevant metric, the debt exceeds the market cap of NG....

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