NATIONAL GRID yesterday called on Ofgem to make “a significant move” to raise tariffs in its forthcoming price review as it reported a 12.4 per cent rise in first-half profits.

Britain’s largest utility has previously criticised the regulator for its “unacceptable” proposals on price restrictions as it prepares to invest £9 billion to upgrade its ageing network.

Steve Holliday, the chief executive of National Grid, said: “This is a very large investment which is required. We need to make sure that the returns earned on this investment are appropriate.

“It’s not in anyone’s interests if our investors are unhappy or if we underinvest.”

Ofgem is due to issue, on December 4, its final proposals for gas and electricity prices for the five years to 2012.

In the next five years National Grid is planning to build infrastructure that will replace ageing assets and to construct pipelines to carry imported gas.

Dwindling supplies of gas in the North Sea mean that Britain will be forced to import about 80 per cent of its gas supply within the next ten years.

In its first half National Grid spent £78 million on the construction of a pipeline that imports gas from Norway’s Ormen Lange gas field.

National Grid’s pre-tax profit, excluding one-off items, rose to £872 million, from £776 million a year earlier. This beat analysts’ forecasts of profits between £815 million and £857 million. Revenue rose to £4.16 billion, from £3.89 billion.

The company announced a £1 billion share buyback, helping to lift its shares 6.8 per cent to 746½p. They have already risen 30 per cent this year.

National Grid plans to step up its focus on its UK and US gas and electricity businesses. It will demerge its wireless business, valued by Citigroup at £1.51 billion. It also plans to dispose of its Basslink electricity arm in Australia in next year’s first half. Mr Holliday declined to estimate the unit’s value, but Citigroup analysts put it at about £290 million.

Subject to regulatory consent, Grid will become the third-largest energy supplier in the US after its £7.3 billion acquisition of KeySpan last year.

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