Filter your content
04 February 2013
In 2009, Centrica acquired a 20% interest in EDF Energy’s eight operational nuclear power stations in the UK and also took an option for a 20% interest in the construction of new nuclear power stations at Hinkley Point and Sizewell. The acquisition was funded through a £2.2 billion Rights Issue, completed in 2008, part of which provided financing for the investment in new nuclear. Having taken the decision not to proceed with the new nuclear investment, the Group will launch a £500 million share repurchase programme, to return surplus capital to shareholders, which will be conducted over the next 12 months.
With pre-development expenditure on the project approaching the agreed £1 billion cap, Centrica’s decision not to proceed follows a detailed appraisal of the project. While there has been progress in a number of key project areas, particularly design and planning, there remains uncertainty about overall project costs and the construction schedule. Centrica’s 20% share of the pre-development expenditure will be written off as an exceptional cost in the Group’s 2012 results.
Sam Laidlaw, Chief Executive of Centrica, said: “We believe that nuclear generation has a valuable role to play in a balanced UK energy mix. Centrica and EDF continue to enjoy a successful partnership in existing nuclear. However, since our initial investment, the anticipated project costs in new nuclear have increased and the construction timetable has extended by a number of years.
“These factors, in particular the lengthening time frame for a return on the capital invested in a project of this scale, have led us to conclude that participation is not right for Centrica and our shareholders. In 2012 we invested over £2 billion in securing supplies of energy for the UK and where we see attractive returns we will continue to invest in Britain’s energy future.”
Centrica’s 20% interest in the eight existing nuclear power stations in the UK is unaffected by this decision.
The company is due to present its Preliminary Results and will provide an update on strategy and investment plans across the Group on 27 February 2013.
Notes to editors
As part of the 2009 transaction, EDF Energy and Centrica plc formed an 80/20 joint venture to undertake pre-development activities for a nuclear new build programme, with the intention of constructing, operating and decommissioning four European Pressurised Nuclear Reactors.
Centrica Investor Relations: 01753 494900
Centrica Media Relations: 0800 107 7014
Centrica is deeply conscious of the cost-of-living challenge facing many of our customers, and we are fully committed to tackling climate change. This is why we have been working to explore pathways for future UK energy policy to 2030 and beyond that are both sustainable and affordable.
Securing long-term affordable energy supplies for our customers is a driving force for how we do business.
British Gas provides gas and power supplies to almost half of Britain's homes. The UK energy sector is facing significant challenges and we are committed to providing greater transparency in order to build trust with our stakeholders.
Securing low carbon energy, delivering value to shareholders, stabilising prices for customers and maintaining low carbon generation.
24 November 2014
20 November 2014
14 November 2014
11 November 2014
01 May 2012
21 June 2011
24 February 2011
Mail on Sunday
03 March 2014
Sir Roger Carr - The Daily Telegraph
11 August 2012
This article was featured in The Daily Telegraph 3 March 2012.
03 March 2012
The financial strength of British Gas is a benefit not a curse for our customers
23 February 2012