- Decision made after detailed review
- Move will help to maintain UK grid stability
- Shares down 8% year-to-date
Shares in British Gas owner Centrica (CNA) were marginally higher in morning trading after the company announced the extension of its four AGR (operational Advanced Gas-cooled Reactor) nuclear power stations alongside partner, EDF.
Chris O’Shea, CEO of Centrica said: ‘Today's extensions to the lives of the zero carbon Heysham 1, Heysham 2, Hartlepool and Torness nuclear power stations are a positive reflection of the valuable investment that Centrica and EDF have made in these plants.
‘The decision was taken after a detailed review process which sought to ensure that the lifetime of the power stations can be extended without compromising safety. The possibility of additional extensions would be subject to the outcome of further reviews, and any new decisions would be communicated publicly.’
EXPERT VIEW
Dan Coatsworth, investment analyst at AJ Bell said: ‘Centrica has a meaningful stake in the four EDF-partnered nuclear power plants. The extension comes as the UK looks to avoid the risk of blackouts amid the transition away from fossil fuels to renewable energy sources.
‘Nuclear energy is more reliable as baseload energy than wind and solar which are dependent on unpredictable weather conditions.
‘Whether through accident or design, Centrica has been well-positioned through the last few years to perform during a volatile period for the energy market – largely thanks to its wholesale operations rather than its British Gas retail arm – as energy security has emerged as a key priority for the UK.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Steven Frazer) own shares in AJ Bell.
