Centrica plc is a British multinational utility company with its headquarters in Windsor, Berkshire. Its principal activity is the supply of electricity and gas to businesses and consumers in the United Kingdom, Ireland and North America.
It is the largest supplier of gas to domestic customers in the United Kingdom, and one of the largest suppliers of electricity, operating under the trading names Scottish Gas in Scotland and British Gas in England and Wales. It owns Bord Gáis Energy in Ireland. It is also active in the exploration and production of natural gas; electricity generation; and the provision of household services including plumbing.
Centrica is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.
Video Centrica
History
Historical origins
The company has its historical origin in the Gas Light and Coke Company which incorporated in 1812. Over the next 137 years, it grew by acquisition of other gas companies to become the primary supplier of gas to Greater London. In 1949, under the Gas Act 1948 the ownership of the company transefered to a government agency, North Thames Gas Board. The Gas Act 1986 sold the company to private investors as British Gas plc.
Origin
Centrica became a separate, distinct corporation on 17 February 1997, when British Gas plc split (demerged) to form three separate companies: Centrica plc, BG plc and Transco plc. Centrica took over gas sales and gas trading, services and retail businesses, together with the gas production operations in the North and South Morecambe gas fields (Rampside Gas Terminal).
In 1998, Centrica's supplier monopoly for gas came to an end. Centrica maintained the British Gas retail brand but is only allowed to use this brand name in the United Kingdom. The electricity market also opened up to competition and, through the British Gas brand, the company started supplying its first domestic electricity customers.
1998 to 2010
In the end of 1998, under CEO Sir Roy Gardner and Finance Director Mark Clare, Centrica attempted to diversify - firstly by developing the Goldfish credit card, then in July 1999, by acquiring the AA for £1.1 billion. In July 2001, Centrica further diversified with the opportunistic purchase of OneTel in the United Kingdom, a residential telecoms operator.
Soon afterwards, Centrica acquired the Dyno franchise group (best known for its Dyno-Rod drains unblocking service). Centrica also moved into the North American energy supply market, through the acquisition of the Canada based company Direct Energy in July 2000, for £406 million. Direct Energy's operations were subsequently considerably expanded through a number of further acquisitions, including of Enbridge Services for £437 million in January 2002.
This strategy of diversification changed in the middle of 2003, possibly under pressure from major city shareholders to deliver better returns and/or possibly anticipating pressure on the core energy supply business. The change of strategy started with the sale of the Goldfish business to Lloyds TSB Bank (who subsequently sold it to Morgan Stanley Bank International Limited).
Then, in July 2004, Centrica sold the AA to two private equity firms; Luxembourgish CVC and British Permira for £1.75 billion. Centrica then acquired Dyno-Rod in October 2004. Then, in December 2005, Centrica sold their OneTel business to Carphone Warehouse.
Since 2005, Centrica has declared a strategy of consolidating within the energy sector, upstream and downstream, including expanding operations overseas. New chairman Roger Carr replaced retiring chairman Sir Michael Perry in 2005, whilst new CEO Sam Laidlaw picked up the reins from retiring CEO Sir Roy Gardner in March 2006.
In January 2006, it was rumoured that the Russian state owned utility company Gazprom was seeking a takeover of Centrica. This created controversy in the media, while the Department for Trade and Industry stated any deal would be subject to "intense scrutiny". Tony Blair announced in April that he would not block any potential deal.
In September 2008, the company acquired the Caythorpe gas-producing field near Bridlington to use for storage purposes. It also agreed to buy 20% of British Energy from EDF, financing this with a £2.2 billion, 3 for 8 rights issue. The rights issue offered shares at 160 pence per share and closed on 12 December 2008. In August 2009, Centrica took over Venture Production, a North Sea gas producer.
2010 to present
On 17 November 2010, Centrica acquired the assets of heat pump installation company Cool Planet Technologies Ltd. for £0.5 million in cash. This will give a boost to company's strategy of developing a broad range of low carbon technologies and advice.
In February 2011, Centrica signed a cool £2 billion three year contract with Qatargas for the purchase of 2.4 million tonnes a year of liquefied natural gas. In March 2011, Centrica agreed the sale of the electricity and gas supply business of its Netherlands-based subsidiary Oxxio to Eneco BV for EUR72 million (£63 million) in cash. The sale completed Centrica's exit from the supply of electricity and gas in Continental Europe, following the earlier disposal of its supply businesses in Belgium and Spain.
In November 2011, Centrica agreed to buy $1.6 billion stakes of 8 fields on the Norwegian continental shelf from Statoil ASA. In a second deal, Centrica agreed to buy 5 billion cubic meters a year gas from the same company from 2015 to 2025 as equal to 5% of gas consumption in the United Kingdom. Centrica's Germany based trading division Centrica Energie GmbH was closed in April 2012.
In July 2013, it was announced that Centrica would acquire the energy marketing unit of Hess Corporation for $1.03 billion. In March 2014, Centrica acquired the retail arm and other assets belonging to Ireland's state owned Bord Gáis for a fee of around EUR1.1 billion.
In 2010, Centrica entered into joint venture arrangements with Tullow Oil to explore for oil in the South Lokichar Basin in Kenya. In August 2014, Tullow, the operator, revealed significant oil discoveries had been made in the Etom 1 exploration well and testing block 10BB, which expanded the already proven South Lokichar Basin "significantly northwards," taking in an additional 247sq km.
In 2016, Centrica launched Local Heroes as part of a shift into more customer facing businesses. Local Heroes is an online home services company working with local tradespeople in a variety of trades including plumbing, electricians and heating engineers.
Maps Centrica
Operations
Centrica's operations are principally focused on the supply of electricity and gas to businesses and consumers in the United Kingdom and North America. Centrica Energy also generates electricity in the United Kingdom and has gas exploration and production operation in Norway. Centrica has some back office functions located in India and South Africa.
Principal divisions and subsidiaries
Continental Europe
- Centrica Energi (Norway)
- Centrica Energy (the Netherlands)
North America
- Direct Energy - one of North America's largest energy and energy-related services providers with more than 5 million residential and commercial customers
- Direct Energy Business Services
- WTU Retail Energy
- CPL Retail Energy
United Kingdom
- British Gas Business - supplies gas and electricity to business customers in the United Kingdom
- Energy360
- British Gas New Heating Limited - provides central heating and gas appliance installation and maintenance and low carbon and energy efficient products and services
- Dyno-Rod - A provider of plumbing and drains and formerly of lock, fire and burglar alarm, and glazing services before this was sold off.
- British Gas Services Limited (trading as British Gas and Scottish Gas) - the market leader in the supply of energy to households in the United Kingdom. British Gas supplies gas and electricity to over 20 million customers in the United Kingdom. Centrica does not own or operate any of the gas transmission or electricity distribution networks in the United Kingdom.
- British Gas Insurance Limited
- Centrica Energy - sources gas and electricity from Centrica's own production and third parties to supply residential and industrial customers in Great Britain and continental Europe
- Gas fields
- Power stations - Centrica currently operates the following eight gas fired power stations in the United Kingdom: Barry; Glanford Brigg; Killingholme A power station; King's Lynn; Langage (885 MW); Peterborough; Roosecote; and South Humber Bank. King's Lynn is currently mothballed, whilst Roosecote was scheduled for demolition due Spring 2015.
- Wind farms - in 2009, Centrica completed its 180 MW Lynn and Inner Dowsing offshore wind farm development and announced plans to build the £725 million Lincs offshore wind farm capable of generating over 270 MW. Centrica has also submitted applications for consent for two offshore wind farms, Docking Shoal and Race Bank, totalling 1,160 MW. Subject to approval and construction, by the middle of the next decade these three projects, together with existing operational wind assets, would give Centrica more than 1.75 GW of generating capacity in the United Kingdom, capable of meeting the annual needs of more than 1.2 million homes.
- Microgeneration - Centrica has secured acquisitions and exclusive access and distribution agreements in microgeneration technologies to build a varied portfolio of low carbon products and services. This includes Solar Technologies, Semplice Energy Ltd and interests in Ceres Power Holdings plc and Econergy.
- Centrica Storage - the United Kingdom's largest gas storage company, it operates the Rough storage facility which provides approximately 70% of current storage capacity
- Newfield Exploration UK
In May 2009, Centrica purchased a 20% stake in nuclear power generator British Energy from EDF Energy. The company now produces 14.3% of its electricity from nuclear (the second highest rate in the United Kingdom), helping it to achieve the lowest carbon emissions of the major providers. Centrica has also acquired an option to purchase a 20% stake in EDF's subsidiary, NNB Generation Company (NNB GenCo).
Senior management
Sam Laidlaw was the chief executive of Centrica between 1 July 2006 and 31 December 2014. In the financial year of 2010, Laidlaw received a total compensation of £1,841,000 from Centrica, comprising a salary of £941,000 and a bonus of £900,000.
Controversies
Greenwash
British Gas was accused of greenwashing in the advertising of its Zero Carbon tariff in January 2008, after the Advertising Standards Association upheld a complaint about the 'greenest domestic tariff' claim.
Customer complaint response
In July 2011, British Gas was fined £2.5 million by the energy regulator Ofgem for failing to deal properly with customer complaints. After a year long investigation into the British Gas, Ofgem found it had breached regulations on how energy companies should handle disputes. Ofgem found that British Gas failed to re open complaints from customers who indicated they felt the matter was not resolved adequately, failed to provide sufficient information to complainants about the energy ombudsman service, and failed to deal properly with complaints from micro businesses because it had not implemented the necessary processes and practices.
A spokesperson for British Gas said the company felt that finding it in breach of rules for failing to provide adequate information to consumers about the energy ombudsman was "disproportionate to the mistake".
British Gas Business was fined £1 million in July after Ofgem's investigation found the company had misreported the amount of electricity supplied under the British government's renewables obligation. British Gas claims it spotted the problem - it said an over-reporting of the amount of renewable energy it was supplying caused by human error - and notified the regulator.
Political activity
Centrica has entered the political arena by threatening an investment strike in response to the Labour Party's proposal for a price freeze. Caroline Flint, the shadow energy secretary, said: "It is not acceptable for companies to threaten that the lights will go out because they don't want greater transparency, competition and accountability".
See also
- Helmont House
References
External links
- Official website
- British Gas https://britishgas.co.uk
- Local Heroes https://www.localheroes.com
Source of the article : Wikipedia
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