Centrica has completed the purchase of the 850MW Severn combined-cycle gas turbine (CCGT) power station in South Wales, UK, from Calon Energy Group for approximately £370m ($435m).
The acquisition enhances Centrica’s flexible generation portfolio, increasing its electricity generation capacity in the UK and Ireland to 4GW.
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This total includes 1GW of assets under planning and construction, enough to provide electricity to up to six million households.
Severn, operational since late 2010, is among the most efficient CCGTs in the UK. It is strategically positioned to deliver large-scale flexible power generation.
Its capacity and adaptability enable it to tap into various revenue streams including the capacity market, providing critical system services to the National Energy System Operator and selling power to the wholesale market.
It is strategically placed near increasing power needs, including data centre developments in South Wales, ensuring long-term use and revenue predictability.
The station is expected to secure average capacity market payments of £35m annually until 2030, with projected annual earnings before interest, taxes, depreciation and amortisation of £30m–60m from 2027, and earnings per share growth from the first full year post-completion.
Centrica group CEO Chris O’Shea said: “We are delighted to add the Severn power station and its talented team to Centrica, which brings our total UK and Ireland electricity generation capacity in planning, construction and operation to 4GW.
“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.”
The acquisition aligns with Centrica’s financial strategy and capital allocation policy.
It also adds £400m to the investment programme announced alongside its 2025 preliminary results, bringing projected capital investment for 2026 to around £1.1bn.
Centrica will fund the Severn acquisition entirely from existing cash, maintaining its cash-free, debt-free position.
