British Gas Launches New Green Business

Centrica PLC
                  

British Gas, the UK's biggest household energy supplier, today announced the
launch of a new business which will lead the company's drive to offer green, low
carbon products and services to customers who want to manage their impact on
climate change.

The business, British Gas New Energy, will compete in a rapidly growing market,
advising customers on how to make their homes and businesses greener and
supplying products and services to facilitate this. Gearóid Lane, previously
Centrica's director of energy procurement, has been appointed managing director
of the new business.

The new business will leverage the green position already established by British
Gas's customer facing businesses. British Gas Residential has the lowest carbon
intensity of any major UK energy supplier and is the leading supplier of green
energy, and British Gas Services is the UK's leading supplier of A-rated, high
efficiency boilers.

British Gas's new business initiatives will include the launch of a service
providing Energy Performance Certificates (EPCs) which, under new legislation,
are mandatory for those selling homes in the UK from 1 June 2007. EPCs will
provide an energy efficiency rating for each building in a market where
approximately 1.4 million homes are sold annually. British Gas Services plans to
have trained 500 of its engineers to carry out the EPC surveys by the end of May
and will recruit further engineers when required as the market expands.

A further new offering is solar heating panels, providing hot water supplies to
the home, which British Gas engineers are now also qualified to install. In
addition, through a new partnership between British Gas and certain local
authorities, customers buying solar panels in some areas of the UK are able to
earn a discount of up to £500 on their council tax. British Gas expects this
scheme to be adopted by more local authorities.

Sam Laidlaw, chief executive of British Gas parent company Centrica, said: 'We
are already the biggest supplier of green electricity to UK homes and have the
lowest carbon intensity of any UK energy supplier. Most UK homes are poorly
insulated and the energy loss and emissions levels from them are much higher
than they could be. We can use our expertise in the green energy sector to help
home owners significantly reduce their impact on the environment and take a lead
in this rapidly growing new business area.'

British Gas is already the largest participant in the Government's Energy
Efficiency Commitment (EEC), under which energy suppliers invest in domestic
energy efficiency improvements. British Gas's EEC investment is expected to
double to around £200m per annum in 2008. British Gas has delivered various
innovative projects within its EEC programme, for example its council tax rebate
scheme for home insulation installations, and will continue to maximise the
commercial opportunity from its EEC activities.

British Gas currently installs over 100,000 domestic boilers each year. It has
taken the lead in the market and now only installs A-rated boilers with maximum
energy efficiency that also have the capability to be linked up to solar heating
equipment or other renewable sources of energy.

British Gas and Centrica have also committed to reduce their own environmental
impacts. This includes a 10% reduction in energy usage in its buildings in the
UK by the end of 2007 compared with December 2006 levels. Action is also being
taken to cap emissions from the company car fleet with effect from May 2007,
together with a continuing programme of driver fuel efficiency coaching and
other initiatives.

As part of its future investment plans in energy efficiency, British Gas is
exploring various new technologies in partnership with other companies. This
includes work to develop a next-generation fuel cell domestic boiler that
produces both heat and electricity and could reduce household carbon emissions
by up to 50%, or up to 2.5 tonnes of CO2 per year.

British Gas New Energy will also extend the company's range of green energy
products, enabling customers to choose gas and electricity supplies that reduce
the climate change impact of the energy consumed. It also plans to help
customers to reduce the impact of their everyday lives on the environment
through offering high quality 'offset' products, using offsets certified by the
European Union and United Nations.

It will take some time for the earnings from British Gas New Energy to become
material. Overall the future UK market for domestic energy efficiency products,
including microgeneration and energy efficient boilers, EPCs, loft and cavity
wall insulation, has the potential to be worth several billion pounds per annum
as awareness of the need for energy efficiency increases.

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Notes to editors:

1. At present, the average household emits 5 tonnes of carbon dioxide a year,
based on gas and electricity consumption. This accounts for approximately 25% of
their total carbon 'footprint', or emissions, with another 25% coming from
travel and the rest from secondary activities such as consumption of food,
clothing, furniture and from leisure activities.

2. Upgrading from an old, inefficient boiler to an A-rated model can save a
household 1 tonne of CO2 annually, or a fifth of average household CO2
production.

3. Centrica is investing £750 million in renewable power generation, principally
offshore wind. Its Lynn and Inner Dowsing development, currently being
constructed off the Lincolnshire coast, is the UK's largest offshore wind
development. Centrica is also developing a project to construct a clean
coal-fired power station on Teesside, using carbon capture and storage, which
could be the UK's cleanest fossil fuel plant.

4. British Gas has the lowest carbon intensity of any of the major UK energy
suppliers in terms of tonnes of CO2 emitted per megawatt hour of electricity
supplied to customers.

5. Options for customers to offset their CO2 emissions would be facilitated by a
mechanism we plan to establish allowing customers to first calculate their own
emissions and then purchase offsets backed by European Union Allowances (EUA) or
Certified Emission Reduction (CER) certificates.