Gas-fired power still looks a safe bet for Centrica in the renewables era
The eye-catching non-Hormuz news in energy-land last month was that Great Britain is set for a record-breaking summer for wind and solar power generation,The national energy system operator even thought there could be periods – a sunny weekend or a bank holiday afternoon of low demand, for example – when more renewable power would be available than the electricity grid needed,So, on the face of it, it is an odd moment for Centrica, the owner of British Gas, to fork out £370m to buy a 16-year-old combined-cycle gas turbine plant in south Wales,After all, the government’s clean power plan imagines that, come 2030, Great Britain’s entire fleet of gas plants will be used to generate only 5% of its electricity, down from 31,5% in 2025.
In reality, the purchase of the 850MW Severn plant near Newport makes strong sense.First, the pure financials stack up: Centrica said it expects top-line annual earnings of £30m-£60m from the facility from next year, implying an earnings yield of more than 10% in the middle of the range.Second, it’s not as if gas-fired power stations earn nothing when they are standing idle.Most get paid just to be available to generate via “capacity market payments”.Severn’s fees from that source are expected to be £35m a year until 2030.
It is unclear, under the government’s plans, how gas plants will be incentivised to stay on the system after 2030 but, since intermittent renewables will need to be supported by a power source that can be turned on at short notice, some form of financial carrot will have to materialise to ensure a core of gas plants survive until more nuclear capacity arrives.Third, there will probably be value in being among the survivors.Severn, built in 2010, may not sound modern but, relative to other plants in Great Britain’s fleet, it is.It may have another decade of life without refurbishment – and refurbishment, note, has become more expensive for older plants now that waiting times for new turbines run into years.And, if the predicted datacentre boom in south Wales materialises, the plant is in the right place.
So it is hard to quibble with Centrica chief executive Chris O’Shea’s explanation: “With the delivery of replacement capacity being impacted by grid access, rising costs and supply chain constraints, alongside the closure of ageing gas assets towards the end of the decade, the need for assets like Severn will increase.”This is the part of the energy transition that gets less attention amid the rollout of solar, wind and battery storage.There is still a need for gas-powered generation to keep the lights on when, for example, it’s a still day in the dead of winter.Gas plants, according to the grand plan, may only produce 5% of Great Britain’s electricity over the course of a whole year but their periods of generation will be concentrated and unpredictable, which probably implies a price premium.For Centrica, the purchase is another step towards becoming an infrastructure-style business with regulated, semi-regulated and contracted revenues.
Last year’s purchase of a 15% stake in Sizewell C power station for £1,3bn – on juicy-looking terms – was in the same style; so, too, the acquisition of the Isle of Grain gas import terminal,On cue, a warning that operating profits from the retail businesses – mainly British Gas – will be “at the lower end of guidance” this year, which knocked the shares down 5%, reinforced the logic of the strategy,An unglamorous gas plant looks more predictable,
Jimmy Kimmel on Trump: ‘His list of threats is now longer than Kash Patel’s bar tab’
Late-night hosts discussed the Trump administration’s confusing messaging about the war in Iran and why fruit-flavoured vapes have suddenly become a Republican priority.On Jimmy Kimmel Live! the host spoke about the conflict in Iran and how the strait of Hormuz is still to be reopened.While Trump claims that the US is close to a deal, Kimmel said it was “still very much in flux, as in what the flux are we doing over there?”Trump has been issuing more threats this week, which led Kimmel to joke that “his list of threats is now longer than Kash Patel’s bar tab”.It’s meant that gas prices are still sky high, with California experiencing the highest in the country.This week will also see Marco Rubio being sent to “make nice” with the pope including asking him “why God didn’t answer his prayers for smaller ears”
Arthur Miller opens up about marriage to Marilyn Monroe in newly unearthed recordings
He was one of the greatest playwrights of the 20th century and she was one of the greatest actors. In newly unearthed recordings made over a period of nearly three decades, Arthur Miller opened up about his short-lived marriage to Marilyn Monroe, saying she wanted a husband who was a “father, lover, friend and agent,” and the child she longed for would have been an “additional problem”.In taped conversations with his friend and biographer Prof Christopher Bigsby, Miller said he had felt “death was always on her [Monroe’s] shoulder – always”. He had believed that if he did not “take care of her life” she would come to a “catastrophic end”.“One time I brought doctors to pump her out because she had swallowed enough stuff [drugs] to kill her,” he said
Jimmy Kimmel on Trump’s ballroom: ‘What can you say? The man loves to dance’
On late night’s Cinco de Mayo edition, hosts focused on the ballooning cost of Donald Trump’s new White House ballroom, the return of the presidential fitness test and a fast-food employee who allegedly fired a gun at a customer for helping themselves to free soda.After touching on Monday night’s Met Gala, Jimmy Kimmel wondered if the glamorous event could have a home next year in Trump’s new White House ballroom.“Originally he said it was cost $200m, and it would be financed by private donors,” Kimmel said. “Then the price tag doubled to $400m, which he said would still be paid for by private donors. Then yesterday, Republicans in the Senate pushed a bill that was allocate a billion dollars of taxpayer money to to go towards this project
In the 60s and 70s, Black students demanded a voice on radio. A new project ensures that history isn’t lost
The HBCU Radio Preservation Project celebrates stations that were an outgrowth of the civil rights movement, to help people understand their importanceAfter Shaw University’s WSHA radio station went on air in 1968, several other historically Black colleges and universities (HBCUs) followed the North Carolina school’s lead, launching a wave of their own.For decades, the students who worked on these channels used them to inform listeners about happenings on campus, while also playing musical selections and offering cultural programming. In doing so, the radio stations at HBCUs became pivotal resources for both the campus and the surrounding community.But the landscape of university-based media is changing. Today, of the more than 100 HBCUs across the country, about 30 have radio stations
Seth Meyers on Trump’s poll ratings: ‘His disapproval is higher than Covid and January 6’
On Monday night, late-night hosts weighed in on Donald Trump’s erratic statements on Iran, rising oil prices and the shuttering of every budget-conscious traveller’s favorite low-cost airline.Seth Meyers opened his Monday night monologue with news of a new poll finding that Americans are overwhelmingly opposed to the Iran war and Trump’s plan to peacefully guide oil tankers through the strait of Hormuz.“Oh wait, I’m getting word that the administration has unveiled a new name for the mission,” the host joked. “Let’s see, what is it called: Operation Clusterfuck.”Meyers then reacted to a new Ipsos poll which showed Trump’s disapproval ratings at a record 62%, in large part due to gas prices rising $1
‘We got a drive-by egging in Baltimore’: Super Furry Animals on making The Man Don’t Give a Fuck
Gruff was the first person I ever met who could just churn out songs – good, catchy ones. I joined his band Ffa Coffi Pawb, but by 1992 they’d split and Gruff and I were living in Cardiff, as were Bunf, Guto and my brother Cian, the other future Furries. We started out doing techno sets, and I had a little home studio where we demoed ideas for songs. Our first singer, the actor Rhys Ifans, slept on a mattress in the corner.I had this Steely Dan album, Countdown to Ecstasy
Great Western Railway to be nationalised in December
US added 115,000 jobs in April in surprise gain amid Iran war uncertainty
UK schools should remove pupils’ online photos as AI blackmail threat grows, say experts
Meta sues Ofcom over fines regime for breaches of Online Safety Act
Slimline Stokes makes impression with pair of wickets on red-ball return
A Piece Of Heaven returns Chester to even keel after ground chaos