South Humber Bank Power Station sold by Centrica in shock £318m deal
30th June 2017
CENTRICA is to sell its South Humber Bank Power Station, in the latest - and last twist - in ownership strategy from British Gas’ parent company.
The huge plant at Stallingborough, put up for sale in 2015 then withdrawn earlier last year, is now to be offloaded along with Langage to EP UK Investments Ltd.
The £318 million deal, will see it become part of the EPH group Europe’s seventh largest power generator.
It already own Eggborough and Lynemouth power stations.
Chief executive of EPH, Daniel Kretinsky (pictured left), said: “We are proud to have the opportunity to continue Centrica’s tradition in the conventional power generation market in the UK.
“This is a significant acquisition in our strategy of increasing our generation capacity in the UK market.
“The two CCGTs will complement our existing UK portfolio of Eggborough and Lynemouth power stations and our Eggborough CCGT development project.”
A looming £63 million investment in the 1,285MW Combined Cycle Gas Turbine (CCGT) plant was confirmed in November 2015 after it won a capacity market contract which will begin in October 2018.
The replacement of the turbines at the 22-year-old site is a mammoth task, starting early next year, and has brought a decade’s security for the 56-strong team, who have seen closures at both Centrica’s North Killingholme sister site, and the neighbouring E.on operation.
It is understood this will go-ahead as planned, as huge investments are already made, with no impact on jobs.
Mark Futyan, Centrica's merchant power director, said: "Centrica acquired South Humber in 2001 and I am proud of the hard work the team has put in to improve plant efficiency and flexibility under difficult market conditions.
"It is the work of this team that has helped to secure a long term future for Humber and delivered market leading safety and operational performance. I know they will continue to succeed under new ownership and I am confident South Humber will continue to contribute to the local economy and community in the years ahead.”
Built in phases from 1994 to 1999 and capable of producing enough electricity to meet the needs of over one million homes, the huge refurbishment will bring in a total of 600 contractors.
In a statement released to the City today, Centrica described the move as “consistent with its strategy to shift investment towards its customer facing businesses and to seek opportunities in flexible peaking units, energy storage and distributed generation, while reducing focus on large scale central power generation”.
Back 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. Also including the 370MW CCGT project at King’s Lynn A. In total the company that recently completed its exit from offshore wind, having been the pioneer with Grimsby’s first three farms, is investing £180 million in new flexible energy storage and gas-fired generation capacity.
The transaction is subject to EU merger clearance and is expected to complete during the second half of 2017.
WHO IS EPH?
Energetický a Prumyslový Holding is a leading Central European energy group that owns and operates assets in the Czech Republic, the Slovak Republic, Germany, Italy, the UK and Hungary.
EPH’s management team began to take shape in 2001 within the corporate investment branch of J&T Group, headed by Daniel Kretínský, now chief executive.
In 2009, J&T Group and PPF Group founded EPH, and independent platform for strategic investments in the energy and ancillary industries.
It is now a vertically integrated energy utility covering the complete value chain ranging from highly efficient co-generation, power generation, and natural gas transmission, gas storage, gas and electricity distribution and supply.
The companies in the group employ nearly 25,000 people, and the last available financials, from 2015, show £10 billion of assets, revenues of £4 billion and earnings of £1.4 billion.
It is the largest supplier of heat in the Czech Republic, the biggest electricity producer and the second biggest electricity distributor and supplier in Slovakia and ranks as the second biggest lignite producer in Germany. It is also an operator of the most robust transmission network in Europe, a key transporter of Russian natural gas to Europe and the biggest gas distributor in Slovakia.
EPH is made up of more than 50 companies structured in two pillars, EP Infrastructure and EP Power Europe.
EP Infrastructure is an energy infrastructure utility focused on gas transmission, gas and power distribution, heat and power generation and gas storage. With principal operations in the Slovak Republic and the Czech Republic, EP Infrastructure is a unique entity with a large and diverse infrastructure asset base.
EP Power Europe is focused on the development of a coherent power generation portfolio. Currently, its main activities are concentrated in Italy, with thermal power generation assets; Slovakia, with mixed assets; and Germany, lignite mining and power generation.
News courtesy: www.humberbusiness.com