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National Grid Profit Climbs 3%

Britain's energy network operator, National Grid, reported a 3% rise in yearly operating profit on Thursday and said it wanted to play a central role in combating climate change.

National Grid also said it was making progress with plans to buy U.S. utility KeySpan , which generates power for New York City and Long Island, and hoped to complete the deal in the autumn.

"Climate change represents both a challenge and opportunity for National Grid," it said. "We will work with regulators, policymakers and governments to reshape regulatory frameworks in the electricity and gas markets."

Britain is expected to publish its Energy White Paper next week with plans for nuclear, renewable and other sources of energy to secure supplies and cut CO2 emissions.

"Our role at the centre of these markets allows us to support change that will benefit our customers, our shareholders and the environment," said National Grid.

Operating profit rose to 2.03 billion pounds ($4 billion) in the year to March 31 from 1.97 billion the previous year after strong results from its electricity distribution business more than offset weakness in gas distribution.

Pretax profit rose 9% to 1.49 billion pounds, in line with analysts' expectations, and the shares remained broadly flat.

National Grid said it was investing 14 billion pounds in its networks in the six years to March 2012.

Removing Bottlenecks

Chief Executive Steve Holliday said National Grid was working to remove bottlenecks, which mean new wind farms currently have to queue to get onto the system.

"A significant amount of that investment is about enhancing the system so it can take all this renewable power," he said. "There are 37 gigawatts of applications for new power plants in the UK, of which 17 gigawatts are for renewable, the vast majority of which are wind."

The group said it planned to use electricity from renewable sources for all its own operations by 2010.

"Well before 2050 we aim to have reduced greenhouse gas emissions from our processes, operations and offices by 60%," it added.

Last February National Grid announced its planned $11.8 billion acquisition of KeySpan and since then has been working on the necessary approvals.

Holliday said the latest discussions focused on how it might deliver $800 million of savings to customers in New York.

National Grid also said it would proceed with a 310 million pound project to increase capacity by 50% at its liquefied natural gas import terminal at the Isle of Grain in Kent.