Centrica Buys Severn Gas Plant for £370m to Boost Flexible Power

Centrica ( (GB:CNA) ) has shared an announcement.

Centrica has completed the £370 million acquisition of the Severn combined-cycle gas turbine power station in South Wales from Calon Energy, lifting its UK and Ireland electricity generation portfolio to 4GW, including assets in planning and construction. Commissioned in 2010, the 850MW Severn plant is among the UK’s most efficient gas-fired stations and is one of a limited number of strategic CCGTs capable of delivering large-scale flexible generation.

The Severn asset is positioned to benefit from multiple revenue streams, including capacity market payments, system services to the National Energy System Operator and wholesale power sales. Centrica expects the plant to generate average capacity market payments of about £35 million annually until 2030 and EBITDA of £30–60 million a year from 2027, with earnings per share becoming accretive from the first full year after completion.

Management argues that Severn will play a critical role in maintaining system stability through the UK’s energy transition, as gas-fired generation remains key for firm and dispatchable power amid grid constraints and the retirement of older plants. The company says the acquisition aligns with its financial framework and capital allocation policy, takes total 2026 capital investment to around £1.1 billion, and is being funded entirely from existing cash resources on a cash-free, debt-free basis.

Centrica acknowledges a small net loss is likely in 2026 due to transaction and integration costs and seasonally weaker summer revenues, but sees scope to enhance returns by leveraging its experience in operating critical infrastructure and optimising Severn’s route to market. The deal underscores Centrica’s push to strengthen its position in flexible generation at a time when demand from new loads such as data centres in South Wales is expected to grow, reinforcing its role in supporting UK energy security and long-term value creation for investors.

The most recent analyst rating on (GB:CNA) stock is a Buy with a £230.00 price target. To see the full list of analyst forecasts on Centrica stock, see the GB:CNA Stock Forecast page.

Spark’s Take on CNA Stock

According to Spark, TipRanks’ AI Analyst, CNA is a Neutral.

Overall score is driven primarily by mid-tier financial performance: strong revenue momentum and consistently positive free cash flow are offset by volatile bottom-line results (net loss in 2025) and a balance sheet that remains only moderately stable. Technicals are mildly supportive with the stock holding above key longer-term moving averages and neutral momentum. Valuation is reasonable with a moderate P/E and dividend yield.

To see Spark’s full report on CNA stock, click here.

More about Centrica

Centrica plc is a UK-based energy company listed on the London Stock Exchange that operates across electricity generation, supply and related services in the UK and Ireland. The group manages a portfolio of flexible power assets, including combined-cycle gas turbine plants, and focuses on supporting energy security and the energy transition while delivering returns for households, businesses and shareholders.

Average Trading Volume: 20,520,355

Technical Sentiment Signal: Buy

Current Market Cap: £9.6B

Learn more about CNA stock on TipRanks’ Stock Analysis page.