Centrica said it was in talks to invest in the new nuclear power plant and hopes to secure a deal in the first half of the year
The chief of Centrica, the company that owns British Gas, has expressed optimism about investing in the new nuclear power plant Sizewell C.
However, he emphasised that any commitment must “give us the returns we need”. Chris O’Shea, Centrica’s chief executive, revealed that the firm is currently in talks about injecting funds into the new Suffolk-based nuclear plant, with hopes to secure a deal within the first half of the year.
He stated: “I like nuclear. I’m really hopeful we can make progress with Sizewell C this year.” Yet, he added that it “all depends on the overall cost of the project and returns. I’m not going to commit Centrica money for something that won’t give us the returns we need,” he declared.
EDF, the French energy giant that owns and operates Britain’s nuclear fleet, and the Government were the initial supporters of the project. However, they have been seeking to raise billions more from potential investors, including Centrica.
Recently, Labour pledged its support for nuclear power, stating it will reform planning rules to facilitate the construction of new nuclear reactors. Mr O’Shea refrained from providing details on the size of the stake Centrica was considering in the group, except to say it would be “between 1% or 2% and 50%”.
These remarks were made as Centrica disclosed that earnings in its British Gas supply division for households and businesses had more than halved last year, dropping to £297m from £751m in 2023, as profits continued to recede following record highs during the energy crisis.
Centrica has pointed the finger at the lack of energy crisis allowance payments for the majority of its recent financial downturn.. Ofgem had previously permitted energy suppliers to claw back costs amassed in the crisis, though this support ended last year.
The energy giant also revealed it has seen a loss of 70,000 household customers, with the British Gas residential customer count dropping from 7.53 million in 2023 to 7.46 million in 2024. British Gas faced another hit as a report by Cornwall Insight last month announced that Octopus Energy had snatched its title as the UK’s number one household energy supplier.
Furthermore, Centrica’s wider business reported a drastic fall in underlying operating profits to £1.55bn for 2024, dramatically down from £2.75bn the previous year, while statutory operating profits sank to £1.7bn from £6.51bn recorded in 2023. Amidst these revelations, households brace for more financial squeeze as Cornwall Insight predicted an £85 hike in the Ofgem price cap to £1,823 come April.
Chris O’Shea said the company is amidst “constructive conversation” with Government officials regarding a proposed £2bn investment in their Rough gas storage site, which lies under the North Sea off England’s east coast and serves as the nation’s biggest gas depot. This investment, Centrica argues, could significantly enhance the site’s capacity and contribute to reduced energy prices – but they’re eyeing additional Government backing to turn their plans into reality.
Mr O’Shea said that if Rough had been fully operational during the peak of the energy crisis over the last two years, “it would have saved UK consumers more than £5bn – that’s £200 for every house in the UK”. He conceded that even with investment in Rough, the current spikes in energy prices hitting households might not have been entirely prevented, but he believes it would “contribute to lower prices”.
The company’s financials revealed a significant increase in capital spending, soaring to £564 million in 2024 from £415m in 2023, as part of a massive £4 billion investment strategy. In a boon for its numerous small shareholders, the firm declared a 13% hike in full-year dividends and an additional £500m in share buybacks, pushing the total scheme to £2bn, set to conclude by the end of 2025.
Following these announcements, shares in the group jumped by 8% on Thursday, buoyed by results that surpassed expectations.
