Centrica mulls gas plant to plug power gap

LONDON (Reuters) - Centrica (CNA.L) may build a gas fired power plant in East Anglia as part of a wider push by power companies to avert a looming supply shortage over the next 15 years.

Centrica, the country's largest energy supplier, is studying building at least one more big plant to help fill a gap in electricity generation expected to be left by the closure of old power stations.

"Our initial findings show that there is at least one site and the site that we have identified so far is in East Anglia, with the potential for 800 megawatts of additional generation," the spokesman said.

Like its competitors, Centrica wants to minimise construction costs and planning obstacles by building at existing power stations.

It owns two plants in the area -- one at Kings Lynn and another at Peterborough -- but the spokesman declined to say which was most likely to be used. No investment decision has been taken and no planning applications made.

The owner of British Gas says the country needs to invest around 20 billion pounds on new power generation by 2020, a target shared by the industry group representing the owners of over 90 percent of Britain's power generation assets.

"Electricity companies want to invest in new low-carbon generation. We estimate that they have to spend at least 20 bln pounds by 2020 to fill the gap left by closing nuclear and coal-fired power stations," said David Porter, Chief Executive of the Association of Electricity Producers (AEP).

"The vast majority of this investment will be in gas-fired plant, renewables and clean coal, as well as nuclear power, if the outcome of the current consultation allows."

Utilities say Britain and the European Union still have not created a stable, long-term framework in which to invest, particularly regarding the financial cost put on spewing carbon into the atmosphere.