NATIONAL GRID will buck market conditions this week when it unveils a £17.5 billion capital-expenditure programme, one of the biggest in the UK corporate sector.

The debt-fuelled £3 billion-a-year plan, details of which will be given at an investor day on Tuesday, represents a £1.5 billion increase on a previous forecast that projected a total spend of £16 billion between 2006 and 2012.

Having already invested £5.4 billion in the past two years, the company now expects to spend £12 billion more to upgrade gas and electricity networks here and in the US up to 2012.

Chief executive Steve Holliday said the beefed-up programme reflected the need to overhaul the UK’s gas and electrical-distribution grid.

“You’ve got to go back to when the national grid was first constructed in the 1950s and 1960s for a comparison,” he said. “We’re seeing growth beyond anything experienced previously.”

About 80% of the outlay will be spent on the UK, with the rest going to National Grid’s assets in America. The tenuous state of the UK’s energy infrastructure was highlighted last week when wholesale power prices jumped after the company warned that maintenance of several power stations would mean an unusually thin margin between supply and expected demand this winter.

The company will also lay bare the heavy cost of the government’s ambitious energy plans that put new nuclear power stations and large offshore wind farms at its heart.

National Grid expects to spend between £5 billion and £9 billion - beyond the basic spending programme - over the next 20 years to hook up the new power sources to the grid. Much of this will go on bringing offshore wind farms onshore and managing the spikes and troughs of wind production.

Holliday expects little trouble in raising the billions the programme will require. About 95% of the company’s assets are regulated, meaning its returns are set by the regulator and grow in tandem with the value of its assets. Investors see it as a safe bet.

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