National Grid’s Clean Energy Vision

Steve Woerner, President, National Grid, New England

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National Grid

Fossil-free vision announcement

On April 19, 2022, we published our Clean Energy Vision: A fossil-free future for cleanly heating homes and businesses

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Specifically, our vision is to fully eliminate fossil fuels from both our gas and electric systems by 2050 – sooner if possible – setting clear and measurable milestones along the way.

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https://www.nationalgrid.com/us/fossilfree

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National Grid

Pillars of our vision for fossil-free heat

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National Grid

Our vision for clean heat includes all customers -- gas customers and electric customers that heat with delivered fuels (oil, propane, wood) or electricity

Buildings heating systems in Massachusetts and New York (% of total)

Comparison of our vision to today and high-electrification of heat

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National Grid

Our roadmap summary

Today

2050

2045

2022 to

2025

2030

2040

Delivering safe, affordable and reliable heat

Setting the foundations to transition to fossil-free heat

Scale a broad set of solutions

Wide adoption of fossil-free heating solutions

Net zero economy-wide emissions

100% fossil-free heat

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National Grid

How our fossil-free vision benefits customers

• Lowest cost: Saves $110-200 Billion compared to other net zero pathways.
• Leverages existing infrastructure: Requires significantly less electric generation, transmission, and distribution infrastructure.
• Leaves no customer behind: Supports equitable outcomes for environmental justice communities. By avoiding large upfront costs, our vision enables all customers to have access to clean energy.
• Preserves customer choice: Keeps heating and cooking options open.
• More resilient and reliable: Not all eggs in one basket.
• Less gas on a winter peak day: Our plan uses less gas than high electrification during peak times.
• Utilizes skill set of our existing workforce: Empowers gas workers to use skill set to achieve our shared net zero goals.
• More likely to reach net zero by 2050: Practical and achievable.

Our plan presents a practical and achievable pathway to net zero.

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National Grid

System Impact: Capturing the value of gas networks to manage winter peak�

ISO NE

Cumulative ISO-NE capex for electric generation, transmission, distribution 2020-2050

By retaining significant gas networks for heat, ISO-NE could avoid significantly higher winter peaks, translating to avoided peak capacity investments of ~$65B by 2040 and ~$71B by 2050, more than a quarter of total investment.

Precedent

Implication

In October 2021, the electric and gas utilities of Quebec filed a proposal to avoid new winter peaking capacity by retaining gas. The Quebec regulator will evaluate the proposal in the next year.

Strategic utilization of the gas networks could avoid significant amounts of incremental capex by serving as security of supply resource.

Electric Transmission

Electric Distribution

Electric Generation

2020

2025

2030

2035

2040

2045

2050

Electric

Hybrid

Managing winter peaks through dual fuel heating could avoid ~$70B of capex by 2050.

250

0

50

300

350

100

150

200

$B (real 2020)

-$15

-$42

-$65

-$77

-$71

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National Grid

Customer affordability: Utilizing existing gas infrastructure lowers cost for customers and allows an equitable transition for all

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National Grid

A hybrid approach results in more affordable and equitable outcomes for our customers

Estimated average total monthly gas and electric energy costs for customers that utilize the gas system

Source: National Grid Net Zero Enablement Plan at 15, Figure 6; National Grid figures based on E3 customer affordability modeling data

Residential

($/month)

Commercial ($/sqft/month)

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National Grid

Customer affordability and equity: Upfront cost comparison

“Affordability results are particularly concerning for lower-income customers given that the upfront cost challenges associated with fully electrifying a building makes it more likely they will experience increasing gas system costs.”

Source: Decarbonization Pathways Report at 79 and 105, Figure 39

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National Grid

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National Grid