Centrica to Develop Power Station

Centrica PLC
                  

Centrica to develop UK's first major power station for five years

Centrica plc today announced it is investing £400 million to develop the first
major power station to start construction in the UK for nearly five years.
Commercial operations at the 885MW gas fired plant in Langage, Devon, are due to
start during winter 2008/2009, providing an additional source of power for the
UK and enabling Centrica to further optimise the cost of supplying electricity
to its British Gas customers.

Langage, which will be one of the UK's most efficient power stations, will be
capable of supplying the equivalent annual power needs of over one million homes
and could meet around 11 per cent of Centrica's forecast peak residential
electricity demand. The station, which is one of only a limited number of large
scale power station projects in the UK with planning consent, is scheduled to
come online as the UK's generation reserve margin continues to decrease over the
coming years.

Centrica has awarded Alstom a fixed price engineering, procurement and
construction (EPC) contract to develop the combined cycle gas turbine plant.
Inclusive of the original acquisition cost, associated costs to develop a gas
pipeline connection to the National Transmission System and current development
costs, the total capital investment would be approximately £400 million. Alstom
will also provide maintenance support to Langage for an initial 12 year period
under a long term service agreement.

Centrica owns the largest fleet of combined cycle gas turbine (CCGT) power
stations in the UK. Once Langage is operational, together with its existing gas
and renewable power generation assets, its Drax supply contract and the Spalding
tolling agreement, Centrica will be able to supply around 71 per cent of its
forecast peak British Gas electricity customer demand from its own sources.

Sir Roy Gardner, Chief Executive of Centrica, said: 'Faced with a volatile
wholesale energy market and a predicted reduction of power generation sources in
the UK over the coming years, this major investment signals Centrica's
commitment to secure the future energy needs for our British Gas customers.'

'British Gas is a leading household electricity supplier and we will continue to
seek opportunities to increase our level of power generation, major contracts
and tolling agreements in order to continue to offer competitive prices to our
customers.'

Malcolm Wicks, Energy Minister, said: 'This is a welcome move by Centrica which
is investing to secure the future energy needs of UK consumers. Langage will
contribute towards the UK's security of supply as new and more efficient power
stations are needed in the coming years to replace existing plant.'

Langage's location in the south-west, which has little existing power generation
capacity, means Centrica will benefit by receiving Transmission Network Use of
System (TNUoS) payments. Centrica's investment has also helped to underpin
National Grid's reinforcement to the gas and power networks in the region.
Enquiries:

Centrica Media Relations:       01753 494085
Centrica Investor Relations:    01753 494900