National Grid 2008 Annual Report Download - page 539

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 20757
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 23
Description: EXHIBIT 15.1
0/7219.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/219/7*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 20757
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-15.1, Doc: 16, Page: 23 Description: EXHIBIT 15.1
0/7219.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/219/7*
Table of Contents
Annual Report and Accounts 2007/08
31
Our capital investment plans reflect changing energy
infrastructure requirements.
Our capital investment programme in our regulated
businesses is based on an assessment of what is needed to
maintain or improve the performance of our regulated
networks or to extend those networks where required to
serve new sources of energy or to reflect changes in
customer demand. This usually takes place within defined
regulatory frameworks that permit us to earn a return on
allowed investments. Capital investment in our non-regulated
businesses is based on the financial return that we expect to
generate.
Our total annual capital expenditure is expected to be in the
order of £3 billion per year over the medium term, a
substantial increase over levels in previous years.
In the UK, there is increasing dependency on gas imports
and plans for significant expansion of renewable energy
sources, as well as the need to increase the rate of asset
replacement in electricity transmission as assets built in the
1960s and 1970s approach the end of their useful lives. The
UK transmission price controls for the next five years include
an allowance of £4.4 billion for investment in our electricity
and gas networks. This investment is to respond to changing
sources of energy and to replace our ageing assets.
Investment is being made in New England to deliver the
regional expansion plan and in upstate New York to address
asset replacement requirements and to increase the safety
and reliability of the network.
Grain LNG’s second phase of development was announced
in March 2005 and is expected to be completed during 2008.
Further investment of £310 million in a third phase was
confirmed in May 2007, with construction beginning in
June 2007. Cumulative investment has now reached
£519 million out of planned investment of approximately
£830 million for all three phases. Phases I and II are
underpinned by long-term contracts signed with BP,
Centrica, Gaz de France and Sonatrach. Phase III also has
long-term contracts for capacity with E.ON, Iberdrola and
Centrica.
Capital
investment
Capital investment is one of the principal drivers
to future growth, as the majority of the capital
investment we make enables us to earn an
increased financial return.
The principal measure we use to monitor organic investment is capital
expenditure, which includes investment in property, plant & equipment
as well as in internall
y
created intan
g
ible assets such as software.
Talent
We aim to maximise the contribution of our employees by
motivating them to strive for continued improvement,
developing their skills and talents and promoting a culture
that recognises and respects inclusion and diversity. In
addition to obtaining the views of employees on an ongoing
basis, we now carry out employee surveys on an annual
basis to identify areas where we can improve.
We have strengthened our talent management processes in
2007/08, creating talent management plans for senior
management and for business critical roles. In addition, for
the first time, we conducted cross-business talent planning
sessions using consistent processes to support senior
management in developing employees within each business
area and to address succession issues.
Our focus on developing the talent of our current and future
business leaders has intensified, with continued growth in
the number of participants in our leadership and
management development programmes. The main areas of
focus have been on our performance for growth programme,
change management, leadership development and
developing future leaders programmes, including the
expansion of our change agent networks.
We continue to invest in the recruitment and development of
skilled employees for the future, recruitin
g
157 trainees on to
our apprentice, foundation engineer, graduate and student
programmes in the UK in the past year. Our UK Foundation
Engineering Programme, launched in early 2006, is
designed to facilitate the entrance, training and progression
of talented people into key engineering roles. In conjunction
with Aston University and our industry sector skills council in
the UK, Energy Utility Skills, we have also designed an
industry specific foundation degree. We are pleased with the
results so far.
Our US university programme, used for engineering
recruitment, brought in 29 new engineers in 2007. With the
completion of the KeySpan acquisition, we are working with
our university partners with the aim of implementing best
practice and ensuring consistency across National Grid.
Through our e-futures strategy, we continue to organise
actively and sponsor a number of educational initiatives in
the UK. These initiatives are designed to increase the
number and diversity of young people interested in
engineering careers and, ultimately, to create and sustain a
greater pool of skilled talent from which we can recruit. Over
the last year, over 4,900 young people have participated in
these initiatives. Key to this success has been the dedicated
involvement of our employees.
The employee en
g
a
g
ement survey completed durin
g
the first
quarter of 2008 will help frame the human resource initiatives
we will put in place to enhance how employees are
supporting the delivery of our vision.
Talent and
skills
Identifying, recruiting and developing talented
people is critical to our future success. We aim to
support all our employees so that they can operate
to the best of their abilities by creating an
environment that allows them to realise their full
p
otential.