Centrica commences tolling agreement with Spalding

Centrica plc today announced it has commenced an energy tolling agreement with the owners of a new gas fired power station at Spalding, Lincolnshire, which will deliver an additional 860MW of electricity to supply British Gas customers. Spalding, together with Centrica’s own power station portfolio, is capable of meeting approximately 55 per cent of the group’s peak residential demand, based on 2005 projections.

Under the tolling agreement signed in 2002, Centrica will supply gas to InterGen’s Spalding plant and has rights to the total capacity. Spalding is a recently commissioned high-efficiency plant, which will use established technology and is designed to operate in a flexible, non baseload regime.

Centrica and InterGen have agreed commercial terms over an initial 17 year period under which Centrica acquires the total plant capacity rights for a combination of fixed and market-related tolling payments. This allows Centrica to supply gas and take the electricity to suit its requirements, whilst leaving operational responsibility with InterGen.

Jake Ulrich, Managing Director of Centrica Energy, said: "Spalding is an innovative tolling agreement which will enable Centrica to access a significant proportion of electricity from a flexible plant.

"The start-up of this contract is a welcome boost as we look to continue sourcing electricity for our British Gas customers from a combination of contracts, equity and market related supplies."