The Centrica PLC (LON: CNA) share price barely moved after announcing that it had decided to extend the lives of its two nuclear reactors. The company postponed closing the Heysham 1 and Hartlepool nuclear power stations to March 2026 instead of March 2024.
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The extensions are expected to add 6TWh to Centrica's electricity generation volumes between 2024 and 2026, about 70% of the company’s total nuclear power volumes generated in 2022. However, investors barely reacted to the news, as evidenced by the lack of movement in Centrica’s share price.
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The muted reaction from investors indicates that they expected Centrica to make this announcement in due course as the UK and other European countries struggle to meet their power needs after cutting Russian gas and oil supplies.
European countries such as Germany have even restarted their coal power plants to meet their energy needs amid the lack of cheap natural gas from Russia triggered by the EU’s decision to eliminate all Russian energy imports into the region and the blow-up of the Nord Stream undersea gas pipeline.
Centrica is one of the most stable UK public companies, having generated £643 million in free cash flow during the financial year first half. The energy company had over £1 billion in net cash, which is relatively high compared to its market capitalisation of £6 billion.
Chris O'Shea, Centrica Group CEO, said: “I’m delighted we've been able to work with EDF to strengthen the UK's energy security by extending the life of these critical power stations. This continues our action to bolster the security of supply in our core markets which includes reopening the Rough gas storage facility in the UK, sanctioning new gas-fired electricity generation capacity in Ireland, and securing increased volumes of gas and renewable power for our customers. We will continue to focus on supporting energy security in our core markets during these uncertain times.”
Centrica shares have risen 8.12% this year as the company, which owns British Gas and provides electricity within the UK, remains critically important to the country’s energy infrastructure.
*This is not investment advice.
The Centrica share price.
The Centrica share price edged 0.89% higher to trade at 105.15p, from Monday’s closing price of 104.22p.
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