National Grid quoted £1.1 billion for Sea Link to planners while asking its regulator for £2.567 billion

Two days before the government rules on Sea Link, National Grid▲+0.85% — National Grid, up 0.85 percent today has a trust problem, and for anyone holding NG.L, National Grid's London-listed shares, it is the money question behind the entire AI-era grid buildout. During the planning examination for the proposed 138km electricity cable between Kent and Suffolk, National Grid Electricity Transmission kept quoting a cost of about £1.1 billion ¹. Documents published by Ofgem↗, the energy regulator for Great Britain, show the same company asked the regulator for £3.197 billion in January 2026, while the examination was still running ¹. On like-for-like figures in 2018/19 prices, that is £1.1 billion against £2.567 billion, more than double. ¹

What National Grid says, and what it does not explain away

National Grid says the lower figure was an early, high-level assessment, not an estimate based on the project's detailed design, and puts the current estimate near £3 billion ¹. It notes Ofgem's minded-to position, the regulator's provisional view ahead of a final funding decision, supports funding for the main delivery contracts. ¹

That may be true. What is harder to explain away is the February funding statement to planning inspectors, still describing £1.1 billion as the estimated cost, submitted a month after the £3.197 billion request. ¹ Campaign group Suffolk Energy Action Solutions wants the October 30 decision paused for an independent cost review; it cites an alternative it estimates at under £300 million. ¹

The sharpest charge comes from the regulator itself

Ofgem's own chair, Mark McAllister, is quoted in a book published this month: "National Grid is gaming the system." ¹ The National Audit Office separately warned in September that major grid upgrades proceed without full business cases, and that constraint costs, the price of a network that cannot carry all the power generated, land on consumers. ¹

The £70 billion buildout earns nothing without an Ofgem allowance

Here is the chain that matters: AI demand needs data centers, data centers need grid connections, grid connections need projects like Sea Link, and those projects only get built at scale if the regulated funding settlement holds.

Roughly £70 billion of new pylons and cables by 2031 earns nothing unless Ofgem allows the costs, and scrutiny this public makes tougher allowances likelier. ¹ I am firmly pro-AI and this buildout has to happen. But grid money flows through regulated monopolies, and a builder that cannot keep its cost story straight between its regulator and its planning inspectors invites the scrutiny that slows everyone down.

The market has not re-priced this yet

The stock slipped to about GBX1,220 on October 28, a fraction of a percent, and Traders Union↗'s analyst calls the cost discrepancy a material concern "until National Grid restores trust on project costing." ²

We reported on October 22 that National Grid's half-year results land on November 5, after the Microsoft/Nscale UK AI campus pullout sharpened questions about its delivery record ³. What to watch now: the funding allowance Ofgem grants, the Energy Secretary's Sea Link ruling on October 30 ¹, and whether those two events, not the day's price move, change what investors will pay for regulated growth.