Oct. 21 (Bloomberg) -- Centrica Plc, the U.K.'s biggest energy supplier, and the British unit of Iberdrola SA said the country must upgrade aging electricity infrastructure to achieve a 2020 renewables target.

``The grid is a problem,'' Sue Wheeler, head of new energy at Centrica, told reporters today at the annual British Wind Energy Association conference in London. ``The targets are challenging but achievable'' if grid connections receive sufficient investment, she said.

The U.K. has a goal to get 15 percent of its energy from renewable sources by 2020, under a European Union proposal. The country, Europe's third-biggest electricity consumer, has expanded wind-power capacity to become the world's largest offshore operator, putting pressure on National Grid Plc's transmission network. Renewables accounted for 1.8 percent of Britain's energy supplies last year.

The U.K.'s alternative-energy goal is dependent on utilities' ability to connect new projects to the grid, rather than on investment in electricity plants themselves, according to Iberdrola's Scottish Power Ltd.

``Lots of investment is needed, both onshore and offshore,'' Scottish Power's Director of Renewables Keith Anderson said at the conference, adding that the renewables target is obtainable. ``The numbers being talked about can be achieved,'' he said.

Connection Contracts

National Grid said in July it's managing 16 gigawatts of signed connection contracts for new renewable electricity production, compared with 77 gigawatts of total generation capacity currently connected. The network may need to support 25 gigawatts of offshore wind turbines by 2020.

``The unprecedented level of connection applications brings the need for substantial transmission investment,'' National Grid said today in an e-mailed statement. The company plans to spend as much as 9 billion pounds ($15.3 billion) through 2020 on networks in England and Wales to connect new renewable and nuclear plants.

The grid operator is also ``working with the Scottish transmission companies on proposals for strategic investment,'' it said. Scottish Power and Scottish & Southern Energy Plc both own high-voltage networks in Scotland.

Wind power became Britain's main source of alternative energy last year, ahead of hydroelectricity.

To contact the reporters on this story: Lars Paulsson in London at lpaulsson@bloomberg.net; Paul Dobson in London at pdobson2@bloomberg.net

Last Updated: October 21, 2008 10:38 EDT