£15bn spend by Centrica set to create jobs for 1500

Centrica today pledged to create 1500 "green-collar" jobs and spend £15 billion by 2020 on plugging the UK's energy gap.

But the company refused to confirm that it is going ahead with its £3 billion acquisition of nuclear power company British Energy.

Announcing near-record profits of £1.9 billion, most of it from the gas it is producing in Morecambe Bay and the North Sea, the British Gas group said it plans to plough back on average £1.4 billion a year over the next 11 years constructing power stations, wind farms and gas storage facilities.

But while it today announced a scheme for a major new £1.2 billion gas storage operation in the spent Baird gas field off the cost of East Anglia, chief executive Sam Laidlaw said that Centrica's plan to co-invest in the £12 billion takeover of British Energy by the French giant EDF is not a done deal.

"We have said all along that we would only recommend a deal that would be in the best interests of our shareholders," said Laidlaw. "We are still in discussions."

Last autumn, Centrica agreed to be a 25% subsidiary investor in the EDF acquisition of Britain's fleet of eight active nuclear power stations, a move that was seen as a result of Government arm-twisting to soothe the political sensitivities of the French takeover.

Centrica subsequently raised £2.2 billion to fund its end of the deal.

But its board is yet to sign off the deal. Factoring in the fall in energy prices since last autumn, City analysts have been arguing that Centrica would effectively be overpaying by as much as 30% for its stake in British Energy.

Critics of the deal also say that, as a junior partner, Centrica may have little control over the scale of its investment in the three nuclear power stations EDF is aiming to build.

While the British Energy deal may yet not happen, Laidlaw said the company's investments to help keep the lights on in the UK over the next decade will see it take on 1500 workers. That will include 1000 apprentices, to be used to implement energy-saving services in the home and in business, and in building wind farms off the east coast of England.

Of the £15 billion Centrica will spend around a fifth will be in developing gas storage facilities like Baird. Gas storage is a key strategic issue for Britain as it moves to being a net importer of energy. The UK can currently store just 5% of its gas demand. France and Germany has facilities to store around a quarter of their demand.