As part of its 2014 business outlook, British energy group Centrica has announced that it planned to refocus investment in UK gas-fired power generation on flexible smaller plants. Centrica currently owns eight gas-fired power stations. One (Roosecote) has been closed and is being decommissioned, and one (King's Lynn) has been mothballed. The smaller three remaining plants (Peterborough, Barry and Brigg) currently operate under Short Term Operating Reserve (STOR) contracts. The three larger power stations (895 MW Langage, 1,266 MW Humber and 665 MW Killingholme) have a combined capacity of 2.8 GW and currently operate in the open market, albeit with low levels of utilisation. Centrica also has a tolling agreement for the Spalding power station until 2021, with options to extend thereafter. With Centrica having adapted its smaller assets to serve as flexible “peaking” plants, it will now focus on this part of the market for gas-fired generation, with flexible plants working alongside baseload nuclear output, variable output from its wind portfolio and peaks in downstream market demand. In addition, to address the continuing operating losses from the fleet, Centrica will seek to release capital from the three larger operating plants with a book value of around £500m (€613m).
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