Power grid investment: The distribution challenge

JUNE'S £3.2bn rights issue from UK-based energy firm National Grid reflects the big investments needed to modernise power grids. The distribution network must be adapted to carry power supplied from intermittent renewable sources, such as wind and solar plants, often generated in remote locations

National Grid says it needs to invest extensively in transmission networks if it is to help meet the UK's existing target – set by the recently departed Labour government – of producing 15% of its energy, or around 35% of electricity, from renewable sources by 2020. The new coalition government has yet to revise the target. The extra funding will go towards more than £5bn ($7.4bn) of investment needed by National Grid to connect new wind farms and nuclear plants to the network, as well as bringing ageing electricity infrastructure up to date and expanding the UK's gas-supply infrastructure. The addition of large quantities of renewable electricity will require the introduction of so-called