Centrica, the parent company of British Gas, has acquired a gas-fired power station in Wales for £370 million, a move its chief executive says will help maintain secure and affordable energy supplies during a period of global price volatility.
Acquisition Details
The household energy supplier announced on Thursday that it has completed the purchase of the Severn gas turbine power station, which it describes as one of the most efficient facilities of its kind in the United Kingdom. The deal expands Centrica's power generation portfolio to four gigawatts and is projected to generate annual earnings between £30 million and £60 million starting in 2027.
This acquisition is part of the company's broader strategy to ramp up capital investment, which is expected to reach approximately £1.1 billion in 2026. Centrica highlighted that the Severn site is strategically located near growing sources of power demand, including developing data centres in south Wales.
Role in Energy Transition
In a statement to investors, Centrica emphasised that natural gas-fired generation will continue to play a critical role in maintaining system stability throughout the UK's energy transition, ensuring security of supply. The company noted that the need for assets like Severn will increase as grid access constraints, rising costs, supply chain issues, and the closure of aging gas assets toward the end of the decade impact the delivery of replacement capacity.
Chris O'Shea, chief executive of Centrica, said: "The importance of reliable, flexible generation to balance the system continues to increase, keeping energy supplies secure and affordable as the energy transition progresses. Severn will play an important role in supporting that journey."
Financial Outlook
Meanwhile, Centrica cautioned investors that earnings from its retail division are expected to be at the lower end of its guidance range of £500 million to £800 million. The company attributed this to warmer weather in recent months, which reduced household energy consumption, and ongoing challenges with collecting bad debt from customers.
Centrica also stated it is monitoring the impact of the war in the Middle East, which has driven oil and gas prices higher since the conflict escalated at the end of February. European natural gas prices remain about a fifth higher than last year, while UK natural gas prices are roughly a quarter higher.
The company is holding its annual general meeting in Cardiff on Thursday morning.
