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MEMO FROM THE FUTURE: NATIONAL GRID

CEO Edition

BOARD STRATEGY SESSION June 2030

TO: National Grid Board of Directors

FROM: John Pettigrew, CEO

DATE: June 2030

SUBJECT: AI-Powered Grid Management and Data Center Power as New Business

OPENING

National Grid owns the UK and US transmission infrastructure. For 100 years, we've transmitted power from generation to distribution. Today, AI is creating two new opportunities: (1) optimizing grid operations with AI, (2) becoming power provider for massive data center growth.

This memo proposes positioning National Grid as "the infrastructure backbone for the AI age."

THE REALITY

Current state: - Revenue: $25 billion (transmission, distribution, gas) - Operating margin: 16% - Customers: Utilities, large industrial customers - Infrastructure: Critical national asset

New opportunity: - Data centers consuming 10-15% of UK/US electricity by 2030 - AI-powered grid optimization could save 5-10% of losses - Data center customers willing to pay premium for reliable power - This is massive growth opportunity

WHERE WE ARE

Today: - Mature utility business - Limited growth potential in traditional transmission - Facing energy transition challenges (renewables intermittency) - Under-monetized infrastructure

THE OPPORTUNITY

Opportunity 1: AI-Powered Grid Optimization

The play: Use AI to manage grid distribution more efficiently, reducing losses and improving reliability.

How: - Deploy sensors across grid (5M+ smart meters, 100K+ substations) - Use AI to predict demand and optimize distribution - Automatically route power to prevent congestion - Reduce transmission losses (currently 7-8%) by 1-2 points

Estimated impact: - Reduce losses by £200-400 million annually - Improve reliability (fewer outages) - Enable higher renewable penetration (smart grid handles intermittency) - Regulatory benefits (better reliability = regulatory approval)

Timeline: 2-3 years to full deployment

Opportunity 2: Data Center Power Business

The play: Become the power provider for UK and US data centers serving AI model training and inference.

How: - Identify data center locations aligned with available power - Offer long-term contracts at premium rates (customers pay extra for reliability) - Build direct connections to major data center operators - Potentially develop data center business (partner with operators or build directly)

Estimated impact: - Data center contracts: 100+ GW capacity by 2035 - Premium pricing: 30-50% higher than commodity power - Revenue: £5-10 billion annually from data center business - This becomes majority of growth

Timeline: 12-18 months to first contracts; 5 years to scale

Opportunity 3: Grid Resilience and Energy Storage

The play: Build energy storage and microgrids to improve grid resilience and handle renewable intermittency.

How: - Invest in battery storage at strategic grid locations - Build microgrids that can operate independently during stress - Offer grid resilience services to large customers - Enable deeper renewable penetration

Estimated impact: - New revenue stream from resilience services - Improved grid reliability - Enable higher renewable penetration - Strategic asset in energy transition

Timeline: 3-5 years

MY RECOMMENDATION

Pursue all three. Grid optimization is near-term (improves efficiency). Data center power is medium-term growth. Resilience is long-term strategic.

EXECUTION PLAN

Phase 1: Grid AI Optimization (2030-2032)

Phase 2: Data Center Power (2031-2035)

Phase 3: Grid Resilience (2032-2035)

FINANCIAL IMPLICATIONS

By 2035:

Stock target: £12-14 by 2035 (from £10 today).

John

Confidential — Board of Directors Only