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Centrica's leader asserts long-term reliance on fossil fuels for energy generation.

British Gas' parent company Centrica, in partnership with US investor Energy Capital Partners, have reached a deal to purchase the Grain facility, located on the Kent banks of the Thames Estuary.

Centrica's leader asserts prolonged gas use is needed for the foreseeable future.
Centrica's leader asserts prolonged gas use is needed for the foreseeable future.

Centrica's leader asserts long-term reliance on fossil fuels for energy generation.

Centrica Bets Big on Gas Amid Energy Transition

Centrica, the UK's leading energy and services company, has made a significant move towards fossil fuel dependence by acquiring the UK's largest LNG import terminal at the Isle of Grain. This £1.5 billion deal comes as the company looks to secure gas supply for the future, despite a decrease in gas demand last year.

The Grain LNG terminal, located on the Kent banks of the Thames Estuary, can provide up to 33% of UK gas demand. This acquisition is a major bet on the continued use of gas as a necessary component of the UK's energy mix moving forward.

Centrica's CEO, Chris O'Shea, has stated that gas will be a key part of the energy transition for decades to come. This view is supported by the company's investment of £1.3 billion for a 15% stake in the new Sizewell C nuclear power plant in Suffolk, which was announced recently.

The continued need for gas-fired power generation is evident as the UK strives to meet demand and maintain energy security. Infrastructure investments in LNG import capacity are also crucial to secure supply diversity and reliability. Long-term supply contracts, such as the one Centrica has signed with US firm Devon Energy, ensure gas availability through at least the next decade.

The Grain LNG terminal's importance to Europe has grown since imports from Russia were cut off following the invasion of Ukraine. LNG met 15% of the UK's gas demand last year and is expected to soar to about 60% by 2050.

This move by Centrica is not without controversy. Critics argue that gas, while less polluting than oil and coal, still contributes to climate change. However, the capacity of renewable sources and infrastructure is still being built up, and gas will be vital to fulfill demand in a less polluting way than these traditional fuels.

The acquisition is subject to regulatory approval and Centrica's equity investment in the Grain LNG terminal is approximately £200 million. The terminal is expected to play a critical role in Britain's energy security infrastructure.

Meanwhile, the wind energy sector has faced challenges this year. Wind farm operators in the UK received £117 million to halt energy production that could have powered every home in Scotland for six months. Shares in Danish wind giant Orsted decreased this week due to a £7 billion fundraising effort to address financial issues, which the company attributed to Trump's policies. US President Donald Trump has promised a ban on new wind farms and recently criticized wind turbines.

Despite these challenges, the energy sector continues to evolve, with DIY investing platforms such as AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212 providing opportunities for individuals to invest in the future of energy.

[1] Centrica to Buy UK's Largest LNG Import Terminal

[3] Centrica Bets Big on Gas Amid Energy Transition

  1. Centrica's acquisition of the UK's largest LNG import terminal signals a significant investment in the finance and energy sectors, representing a major bet on gas as a crucial component of the UK's energy mix transition.
  2. The energy industry is undergoing evolution, with individuals now having the opportunity to invest in the future of energy through DIY platforms such as AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212, while companies like Centrica continue to invest heavily in gas infrastructure.

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