British Gas owner Centrica PLC (LSE:CNA) has completed the £370 million acquisition of a gas-fired power station in south Wales, as it flagged strong infrastructure earnings but weaker retail performance in its latest trading update.
The FTSE 100 energy supplier said the 850MW Severn power plant lifts its power portfolio to 4GW, including assets in development. The site is expected to generate annual EBITDA of £30 million to £60 million from 2027 and deliver around £35 million a year in capacity market payments to 2030.
The deal forms part of a wider investment push, with capital expenditure for 2026 expected to reach around £1.1 billion.
In an update ahead of its annual shareholder meeting, Centrica said infrastructure earnings are set to come in above the top end of guidance, supported by higher realised prices and continued strong performance from its meter asset provider business.
By contrast, EBITDA from the British Gas retail business is expected towards the lower end of its range, reflecting warmer weather, commodity price movements and ongoing challenges in collecting bad debts from household customers.
Guidance for the Optimisation division is unchanged.
"The outlook is subject to the usual uncertainties for the balance of the year, including weather, commodity prices, regulation and government policy," Centrica said. "We also continue to monitor the impact of the ongoing conflict in the Middle East."
It stressed that the Severn combined-cycle gas turbine (CCGT) power station, commissioned in 2010, is one of the UK’s more efficient gas-fired stations and is positioned near growing sources of power demand, including data centre developments.
O'Shea said: "The importance of reliable, flexible generation to balance the system continues to increase, keeping energy supplies secure and affordable as the energy transition progresses.
"Severn will play an important role in supporting that journey. With the delivery of replacement capacity being impacted by grid access, rising costs and supply chain constraints, alongside the closure of ageing gas assets towards the end of the decade, the need for assets like Severn will increase."