Centrica, the owner of British Gas, has acquired a gas-fired power station in Wales for £370 million. The company’s chief executive stated that the purchase will help maintain secure and affordable energy supplies during a period of global price spikes.
Acquisition Details
The household energy business announced the completion of the acquisition of the Severn gas turbine power station, which it described as one of the most efficient facilities in the United Kingdom. The deal expands Centrica’s power portfolio to four gigawatts and is projected to generate annual earnings between £30 million and £60 million starting from 2027.
This acquisition is part of the group’s broader strategy to increase capital investment, which is expected to reach approximately £1.1 billion in 2026. The company held its annual general meeting in Cardiff on Thursday, where it highlighted the strategic location of the Severn site near growing sources of power demand, including developing data centres in south Wales.
Role in Energy Transition
Centrica informed investors that natural gas-fired generation will continue to play a critical role in maintaining system stability throughout the UK’s energy transition by ensuring security of supply. Chris O’Shea, Centrica’s chief executive, emphasised the increasing importance of reliable and flexible generation to balance the system, keeping energy supplies secure and affordable as the transition progresses.
He noted that the delivery of replacement capacity is being impacted by grid access issues, rising costs, and supply chain constraints, alongside the closure of aging gas assets towards the end of the decade. This, he said, will increase the need for assets like Severn.
Retail Division Performance
Meanwhile, Centrica told investors that it expects earnings from its retail division to be at the lower end of its guidance range of £500 million to £800 million. This reflects warmer weather in recent months, which has reduced customer energy usage for heating, and ongoing challenges with collecting bad debt from household customers.
The company also stated that it is monitoring the impact of the war in the Middle East, which has driven oil and gas prices higher since the conflict began at the end of February. European natural gas prices are currently about a fifth higher than last year, while UK natural gas prices are approximately a quarter higher.
Executive Pay Discontent
At the firm’s AGM, Centrica investors expressed dissatisfaction with executive pay for the second consecutive year. More than 12% of investor votes were cast against pay plans for top executives, following the company’s decision to award Mr O’Shea £3.6 million in bonuses and share awards last year, despite earnings nearly halving.
Centrica’s annual report revealed that Mr O’Shea received a £1.4 million annual bonus and £2.2 million in long-term share awards for 2025, in addition to his £1.04 million salary. His total pay package for 2025 was £4.73 million, down from £5.08 million in 2024.
While the shareholder dissent was insufficient to block the pay plans, it follows a more significant rebellion at last year’s AGM, when nearly 40% of shareholders voted against the board’s remuneration report.
