Centrica offloads storage facility as part of £318m deal

British Gas parent company Centrica has agreed to sell its South Humber Bank gas-fired power station to a major European business.

The utility company is also selling its Plymouth power station as part of the £318m deal to EP UK Investments.

EP’s parent company EPH is Europe’s seventh largest power generator and owns the Eggborough and Lynemouth power stations.

The transaction is subject to EU merger clearance and is expected to complete during the second half of 2017.

Together, the two combined cycle gas turbine power stations have a capacity of 2.3GW.

Centrica said this was down to a strategy aimed at shifting investment towards its customer-facing businesses, and focusing on flexible peaking units, energy storage and distributed generation and reducing focus on large scale central power generation.

The owner of British Gas has also announced the closure of the Rough facility in Yorkshire, a major gas storage site, prompting fears of more volatile winter gas prices. The site opened in 1985 and can hold about nine days’ gas supply. It will close as a storage facility once its remaining gas reserves have been sold over the next four to five years.

Centrica’s Distributed Energy & Power business was established in 2015, and in December 2016 Centrica was awarded capacity market agreements for two fast-response gas peaking plants at Brigg and Peterborough and a battery storage facility in Cumbria.

Including the 370MW project at King’s Lynn A, Centrica is investing £180m in new flexible energy storage and gas-fired generation capacity.