Centrica’s €70m move into power control sector
THE owner of British Gas has deepened its presence in the growing market for power control after paying €70m (£62m) for a European technology firm that can flex the electricity demand of heavy energy users to help balance fluctuations on the grid.
Antwerp-based Restore uses software to control the energy demand of 150 industrial and commercial customers across Belgium, the UK, France and Germany by turning demand down when supplies are tight and letting it go higher when electricity is ample. In total, Restore controls 1.7GW worth of power demand, the capacity equivalent of half the new Hinkley Point power plant. At a stroke, it can cut hundreds of megawatts of demand from the grid by temporarily reducing its customers’ energy use for non-essential operations such as air conditioning, until overall demand wanes or power supplies are able to ramp up.
This niche area of the energy sector has become increasingly important in recent years amid the boom in intermittent renewable generation. National Grid estimates that by 2030 it will rely mostly on demand flexibility to balance the energy system. Centrica hopes to expand the technology across the UK and into its North America business. The deal, however, is unlikely to help Centrica’s battered share price, according to Barclays. Earnings from the burgeoning distributed energy division are still negligible and Mark Lewis, an equity analyst at the bank, said the ongoing government efforts to cap the price of standard domestic energy tariffs would remain the main driver for Centrica shares.
The shares, which were trading above 235p at the start of the year, firmed 0.7p yesterday to end at 167.7p.