British Gas owner Centrica has bought a gas-fired power station in Wales for £370 million which its boss said will help keep energy supplies “secure and affordable” amid a global spike in gas prices.
The household energy business said it had completed the acquisition of the Severn gas turbine power station, which it said is one of the most efficient in the UK.
The deal brings Centrica’s power portfolio to four gigawatts and is expected to generate annual earnings of between £30 million and £60 million from 2027.
It forms part of the group’s efforts to increase capital investment which is expected to total around £1.1 billion in 2026.
The company, which held its annual general meeting (AGM) in Cardiff on Thursday, said the Severn site is strategically positioned near to growing sources of power demand, including developing data centres in south Wales.
It told investors that natural gas-fired generation will “continue to play a critical role in maintaining system stability through the UK’s energy transition” by “ensuring security of supply”.
Chris O’Shea, Centrica’s chief executive, 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 aging gas assets towards the end of the decade, the need for assets like Severn will increase.”
Meanwhile, Centrica told investors it is expecting earnings from its retail division to be at the “lower end” of its guidance range, which is between £500 million and £800 million.
This reflects warmer weather over recent months – which indicates customers have not needed to use as much energy to heat their homes – and ongoing challenges with collecting bad debt from household customers.
The company said it is monitoring the impact of the war in the Middle East, which has sent oil and gas prices soaring since the conflict began at the end of February.
European natural gas prices remain about a fifth higher than they were last year, and UK natural gas prices are about a quarter higher.
At the firm’s AGM, Centrica investors also voiced their discontent at executive pay for the second year in a row.
More than 12% of investor votes were cast against pay plans for top bosses, following the firm’s move to hand Mr O’Shea £3.6 million in bonuses and share awards last year despite seeing earnings nearly halve.
The power giant’s annual report earlier this year revealed Mr O’Shea picked up a £1.4 million annual bonus and £2.2 million in long-term share awards for 2025, on top of his £1.04 million salary.
Mr O’Shea’s total pay package stood at £4.73 million for 2025, down from £5.08 million in 2024, according to the report.
While the shareholder dissent was not enough to stop the pay plans being voted through, it follows a more forceful rebellion at least year’s AGM, when nearly 40% of shareholders voted against the board’s remuneration report.
