National Grid extracts £5.4 billion in profits whilst £200 billion in renewable projects wait for connection
Britain's privatised electricity infrastructure operator makes £187 per household annually while presiding over the longest grid delays in Europe
Every British household pays £187 each year into National Grid plc's operating profits. For that money, they receive the worst renewable energy connection delays in Europe.
The privatised monopoly posted underlying operating profits of £5.357 billion for the financial year ending March 2025. During that same period, £200 billion worth of clean energy projects languished in a connection queue stretching up to 15 years. The arithmetic is stark: a decade of these profits totals £53.6 billion - more than the £50 billion needed to upgrade the grid properly.
This isn't system failure. It's system design. Monopoly infrastructure operators maximise shareholder returns by underinvesting in the capacity Britain's energy transition requires.
Projects waiting until 2040
Between 700 and 800 gigawatts of generation capacity sits in the grid connection queue - roughly four times what Britain will need by 2050. Projects applying for connection today receive dates in the late 2030s. Waiting times range from eight to 15 years.
Scotland generates exceptional wind power thanks to strong resources and cheap land. Yet Scottish projects face the longest delays. Wind farms ready to begin construction cannot generate electricity for over a decade because connection points lack capacity.
Tom Edwards, an energy analyst at Cornwall Insight, identifies the core problem: constraint payments exist precisely because the grid lacks capacity. Wind farms in remote areas must switch off when the network cannot transport their power south, whilst gas-fired plants near demand centres are simultaneously paid to increase output.
The National Energy System Operator recently cleared speculative "zombie projects" from the queue and prioritised ready-to-build developments. These administrative changes cannot resolve the underlying infrastructure deficit. Viable projects still cannot connect.
£1 billion to waste cheap electricity
Britain spent over £1 billion in 2024 paying wind farms to switch off during high production. These "constraint payments" will reach £1.8 billion in 2025. Some analysts warn they could hit £6 billion annually by 2030 without infrastructure expansion.
Scottish wind farms accounted for 98% of curtailed generation in 2024, despite Scotland providing only 35% of UK wind capacity. The Seagreen offshore wind farm off Angus alone was responsible for 40% of total constraints, according to the Renewable Energy Foundation.
Mainstream coverage consistently mischaracterises these payments. They represent compensation for lost marginal revenue - primarily lost subsidies and renewable energy certificates - not windfall profits. The grid operator failed to build necessary infrastructure. Wind farm operators are compensated for the resulting waste.
Here's what coverage ignores: wind farms represent just 24% of total constraint costs. The remaining 76% - approximately £846 million in 2024 - goes to gas generators to increase output when renewable generation must be replaced. Wind farms receive compensation limited to lost marginal revenue. Gas generators charge full market rates when asked to ramp up.
How gas prices determine everything
Britain employs marginal cost pricing for electricity. The most expensive generator needed to meet demand - almost always gas-fired power stations - sets the wholesale price that all generators receive.
Research published in 2023 found that gas set the marginal price 98% of the time in Britain, despite providing only 30 to 40% of generation. Even small amounts of gas generation trigger marginal pricing for the entire system. When wind and solar cannot meet demand completely, gas plants switch on at around £600 per megawatt hour and that price determines what all generators receive - including renewables that produce electricity for £50 to £140 per MWh.
British households consequently face some of the world's highest electricity costs. The April 2025 energy price cap sets electricity at 27.03 pence per kilowatt-hour compared to 6.99 pence for gas - a disparity driven primarily by marginal pricing rather than renewable generation costs.
Many renewable generators operate under Contracts for Difference schemes that fix their revenues, with excess profits flowing back to government during high-price periods. But new renewable capacity faces decade-long connection delays that perpetuate the gas-price-setting dynamic. Consumers keep paying gas-level prices for increasing amounts of renewable electricity.
Where ownership interests align
National Grid plc is publicly traded with institutional investors dominating its shareholder base. BlackRock Fund Advisors holds approximately 3.2%, Vanguard Group approximately 3%, and Abu Dhabi Investment Authority approximately 2.4%. Norges Bank Investment Management, Legal & General, and various pension funds and investment managers hold additional significant stakes.
The company has been systematically selling infrastructure assets. In 2016, it sold a 61% stake in its gas distribution business to a consortium led by Macquarie Infrastructure, including Qatar Investment Authority and China Investment Corporation. In 2023, it sold its remaining gas transmission stake. Macquarie Asset Management now holds 80% of that business, operating as National Gas.
Media ownership discussing these energy issues merits examination. Talk TV, where debates about renewable energy costs regularly occur, is owned by News UK, a subsidiary of Rupert Murdoch's News Corp. The Daily Telegraph, which frequently publishes articles attributing high electricity costs to renewable energy, is now owned by US-based RedBird Capital Partners, with Abu Dhabi's International Media Investments holding up to 15%. This followed a 2023-2024 saga where the UK government blocked full foreign state ownership.
These ownership connections don't prove coordination. They reveal structural alignment. Infrastructure operators benefit from underinvestment that creates scarcity value whilst extracting monopoly profits. Certain investors hold stakes across both infrastructure and media assets. Coverage frequently attributes grid costs to renewable energy deployment rather than inadequate infrastructure investment.
The solution already exists
The infrastructure deficit imposes compounding costs. Consumers pay £5.36 billion in annual operating profits that could fund grid upgrades. They pay constraint payments exceeding £1 billion annually to switch off cheap renewable generation. They pay higher wholesale prices because inadequate capacity forces continued reliance on expensive gas generation. They forgo economic benefits from £200 billion in delayed renewable projects that would create jobs and reduce energy import dependence.
National Grid announced plans to invest £60 billion over five years, following decades of underinvestment whilst extracting substantial profits. Three subsea cables will carry electricity from Scotland to England. One is running 16 months late and won't complete until April 2029. Until then, constraint payments will continue rising.
Energy analysts note that £50 billion needed to upgrade grid infrastructure properly could be funded through a decade of redirected operating profits. This would eliminate constraint payments, accelerate connection of waiting renewable projects, reduce reliance on gas generation for both supply and price-setting, and create substantial economic activity.
Ed Miliband has taken some actions to accelerate connections, including supporting recent queue reforms and backing transmission infrastructure expansion. But available funding after operating profits flow to shareholders won't build necessary capacity quickly enough for the government's 2030 clean power targets.
This reveals a policy choice embedded in Britain's 1990 grid privatisation: shareholder returns over infrastructure investment. What appears as technical failure or renewable energy costs is actually a business model succeeding in its core function - extracting maximum value from a natural monopoly whilst minimising capital expenditure.
British households pay £187 each annually in grid operator profits, £1.8 billion collectively in constraint payments, and Europe's highest electricity prices through marginal cost pricing. Meanwhile, clean energy projects that could resolve all three problems wait over a decade to connect. Relief may arrive in 2029 when delayed transmission upgrades complete - after years of foregone benefits and unnecessary costs.
The solution is straightforward: redirect a decade of monopoly profits into the grid upgrades they should have funded. Instead, households pay four times - for the profits, for wasting cheap energy, for replacing it with expensive gas, and for delaying the projects that could end this cycle. That's the real energy scandal most media won't examine.
