Centrica to create 1,500 green and engineering jobs

 

Centrica, the owner of British Gas, has announced it is creating 1,500 mostly "green-collar" jobs to build wind farms and low-carbon power plants like nuclear reactors and also to install energy-saving insulation in customers' homes.

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Sam Laidlaw, chief executive, said the jobs will be created over the next year as the company gears up to invest £15bn by 2020 to build the kit, as well as investing in new sources of gas supply and gas storage facilities.

The company, which announced it was cutting gas bills last month by 10%, did not commit to further price cuts. Last year British Gas increased gas bills by half, blaming soaring oil and wholesale energy prices. Since last summer's peak, energy prices have slumped by more than half.

Nick Luff, finance director, said: "It's early days. We will see how the wholesale [power and gas] market develops. British Gas has to a track record of leading the market [in cutting bills]. We will do what we can when we can."

British Gas is the largest energy supplier in the UK, supplying about half of the UK's households with gas and about 6m homes with electricity.

Laidlaw said that negotiations were continuing with French-owned rival EDF Energy over buying a stake in nuclear generator British Energy. EDF signed an agreement in principle to sell a 25% stake in the company to Centrica when the French group bought British Energy last autumn. But since then power and share prices have slumped and some Centrica shareholders are understood to be urging Laidlaw to pull out of the deal.

Laidlaw indicated that he was trying to renegotiate the price. "We are continuing to renegotiate with EDF over British Energy," he said this morning. "We believe the [deal's] strategic value still exists. However we need to ensure as we progress that the deal meets all requirements to add value to shareholders and for strategic reasons. We [Centrica management and its shareholders] are all on the same side. We are all clear we want to get a good deal which makes sense."

This morning, Centrica announced that group profits for last year fell by a fifth to £904m because of higher taxes. The company also announced £1.4bn of writedowns on the value of forward contracts it had signed to purchase gas and electricity in the market to supply its customers. Because energy prices have slumped since last summer's peak, this has left these forward contracts out of the money.

Laidlaw said: "We clearly had a tough year due to extreme volatility in wholesale power and gas prices." He said trying to avoid this in future was one reason why he wanted to buy a stake in British Energy. "The sheer scale of the movement in the markets means we had a very big swing - [the writedown] reflects that prices have fallen very quickly," he added. "It's one of the reasons we would like to have more sources of energy under our own control - to reduce volatility in earnings and exposure to the volatile wholesale [energy] market."

Profits fell at the British Gas supply business because the company did not pass on to customers the full increase in the wholesale cost of energy when prices were at their peak. But this was offset by a rise in profits at Centrica's gas production arm, which benefited from higher gas prices.

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