Centrica agrees first coal-indexed power purchase agreement

Centrica plc today announced it has agreed its first coal-indexed power purchase agreement, which will see International Power supplying a daily 250MW volume of peak electricity to British Gas, commencing in October 2005.

The agreement, which will run for three years, is in line with Centrica’s aim of bringing greater diversity to its power portfolio by including coal indexation.

The price paid under the contract, which will deliver around 2.34TWh over the term, will be directly indexed to international coal prices.

Jake Ulrich, Managing Director of Centrica Energy, said: “As the UK’s leading domestic electricity supplier, our British Gas business will benefit from this agreement which further diversifies the range of sources from which we procure our power.

“This is the first step in our strategy to increase the link between our input costs and coal pricing and we expect to consider other similar opportunities going forward.”