Centrica Buys 16-Year-Old Severn Gas Power Station in Wales for £370m

Centrica has paid £370m to acquire the Severn gas turbine power station in Wales from Calon Energy Group. The 16-year-old plant is one of the most efficient in the UK and is located near developing data centres in south Wales. Chief Executive Chris O’Shea said the purchase will help keep energy supplies secure and affordable.

Natural gas-fired generation will continue to play a critical role in maintaining system stability through the UK’s energy transition by ensuring security of supply, O’Shea told investors. He cited delays to grid connections for new generators, along with supply chain issues and rising costs, stating that the need for assets like Severn will increase.

Many of the UK’s existing gas generators are set to close by the end of the decade, he added.

“The importance of reliable, flexible generation to balance the system continues to increase, keeping energy supplies secure and affordable as the energy transition progresses,” O’Shea said. ” Under Britain’s Net Zero plans, 95 per cent of electricity will be generated by clean sources by 2030. Renewables already generate around half of UK electricity supply.

Even so, intermittent output from weather-dependent sources requires backup from reliable generation such as gas and nuclear. Shadow Energy Secretary Claire Coutinho said Centrica’s move highlighted the need to build more gas power stations. She stated that even under existing Net Zero rules, more gas and nuclear plants needed to come online.

“What Ed Miliband never acknowledges is that even under his plans we need reliable power plants that don't depend on the weather. That means we need more nuclear and more gas,” Coutinho said. Andy Mayer, energy analyst at the Institute of Economic Affairs, said Centrica’s decision to acquire a 16-year-old gas power station reflects the reality that the UK has chosen to build a duplicate power system.