Centrica goes Dutch with power station deal

ROTTERDAM, NETHERLANDS - British Gas group Centrica today signalled its intention to expand into the Dutch energy market, signing agreements to control the supply and output of a new state-of-the-art power station near Rotterdam.

Long frustrated in bids to break into the mainly closed shop of the European power industry, Centrica said it is adding electricity generation in Holland alongside the 640,000 household customers it has already picked up in the country.

Power-station builder Intergen is aiming to finish the low-emission gas-powered Rijnmond 2 power station by the end of 2009. Centrica has signed an agreement not only to supply the station from its own significant upstream gas supplies, but also to take all 400 megawatts of its output.

That would give Centrica control of around 2% of Holland's electricitygeneration capacity - a significant move for a company which, in its own UK domestic market, has the largest number of customers but only 4% of the nation's power capacity.

Centrica said the move would enable it to supply 80% of its Dutch customers from its own resources, instead of having to source more expensive electricity in the open market.

"We view the Netherlands as a key market given its proximity to the UK, which is being liberalised more quickly than elsewhere in continental Europe," said Centrica's European chief, Jake Ulrich.

Centrica is also eying expansion in the Belgian market, where it is also already present.