Centrica Sells UK Power Plant

UK utility Centrica has agreed to sell its 382-MW King's Lynn combined cycle gas turbine (CCGT) power station to Germany's RWE for £105 ($138)mn, based on a valuation date of 31 December 2019, it said. The transaction is expected to complete in the first quarter of 2020.

The transaction forms part of Centrica's non-core asset disposal programme announced in February 2019 that it needs to restore value to its share price. Other assets include its nuclear generation assets and its majority share in Spirit Energy, the European upstream joint venture. It is also consistent with Centrica's strategy to reposition towards the customer, and as part of this from central to distributed generation.

The new King's Lynn CCGT was commissioned on November 18 following a major replant by Siemens, including the installation of a new gas turbine. The power station is designed for maximum efficiency and flexibility, supporting the transition to a low carbon energy system which is increasingly reliant on intermittent renewables.

The power station has a 15-year capacity market agreement which starts in October 2020, following the European Commission's approval of the UK capacity mechanism. CEO Iain Conn is to retire from the board in 2020; so far no successor has been announced. The company was badly affected by the previous Conservative government's decision to cap household energy tariffs.