National Grid: demonstrating accountability by sharing its Climate Transition Plan
National Grid plc is one of the world’s largest investor-owned energy utilities, delivering electricity and gas across the UK and Eastern U.S. In June 2022, National Grid became one of the first organizations to publish and share its Climate Transition Plan, Reaching Real Zero. This ambitious strategy sets out the organization’s roadmap to achieving ‘real zero’ emissions by 2050, with bold intermediate goals for 2030.
National Grid’s Climate Transition Plan is based on a solid understanding of where the organization’s material areas of impact are; not only within its own operations (direct Scope 1 emissions) and energy usage (indirect Scope 2 emissions), but also impacts from the wider value chain (Scope 3 emissions). This sees the company set and share a Climate Action Plan with key information regarding the business’s preparedness to shape and succeed in a net-zero world.
Considering the entirety of its climate footprint allows National Grid to identify which business operations have most significance and where it has the most influence and control. The business can then set in place meaningful action, working with the Science Based Targets initiative (SBTi) to set greenhouse gas emissions reduction targets across all of these areas, verified as being in line with a below 2°C pathway. Its UK Electricity Transmission, UK Electricity Distribution and Electricity System Operator businesses have gone further to align their 2030 emissions reduction targets to SBTi’s more ambitious 1.5°C pathway.
Transparent targets are the first step in developing a credible Climate Transition Plan. National Grid’s strategy goes further in outlining the tangible actions and innovation required to make significant reductions in greenhouse gas emissions across each of their material areas of impact. The company’s recent strategic pivot towards electricity and divestment of its gas business in the UK, for example, demonstrates accountability for delivering decarbonized power grids, heating and transport.
In the US, it has acquired Geronimo, a leading developer of wind and solar generation assets, launching National Grid Renewables for its US renewable energy business, focused on accelerating the clean energy transition. In February 2022 a joint venture with RWE Renewables was successful in the NY Bight offshore capacity auction, which has the potential to connect up to 3000 MW of clean renewable energy to New York by the end of the decade.
The combined actions shared within National Grid’s Climate Transition Plan aim to halve emissions across the Group by 2030 (from 2016) and reduce them to zero by 2050, limiting the use of external offsets. This means striving for operational emissions to reach zero in absolute terms, with potentially a very small amount of residual emissions remaining, such as air travel. Its public CDP disclosure states: “We have a crucial responsibility to help make the transition to a low-carbon economy happen” with its published plan “at the heart of the energy transition.”
Accountability is further ensured with Scope 1 and 2 greenhouse gas emissions reported in line with the World Resources Institute (WRI) and WBCSD’s Greenhouse Gas Protocol Corporate Standard for the seven Kyoto Protocol gases, using the operational control approach for emissions accounting. Scope 1 and 2 emissions are independently assured against the international standard ISO14064-3 Greenhouse Gas Assurance Protocol. National Grid’s Scope 3 emissions are reported in line with the WRI/WBCSD Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Standard.
By 2030, National Grid’s action plan is projected to reduce the carbon intensity (tCO2/MWh) of the group generation portfolio by 80%, from a FY1990 base year. Having the governance and financial structures in place to deliver this ambition is also critical. In the past year, National Grid has invested £6.7 billion (continuing operations) in the journey to net zero, 73% in green investment, and expects to spend £30-35 billion over the five-year period from 2021/22 to 2025/26, of which £24 billion will be placed into green investments.