The Centrica purchase comes just days after UK Coal announced the closure of another domestic coal mine, Welbeck mine in Nottinghamshire. Despite Centrica’s new coal-dependent order, International Power will source its coal mainly through imports.
International Power will supply Centrica’s power order from its coal-fired plant at Rugeley, Staffordshire. The price paid under the contract will be directly indexed to international coal prices. The supply agreement will start in October 2005.
Jake Ulrich, managing director of Centrica Energy, said: As the UK’s leading domestic electricity supplier, our British Gas business will benefit from this agreement which further diversifies the range of sources from which we procure our power. This is the first step in our strategy to increase the link between our input costs and coal pricing and we expect to consider other similar opportunities going forward.
