Powergen is one of the UK's leading integrated electricity and gas companies operating in the increasingly competitive England, Wales, Scotland and Northern Ireland energy markets.

 

The UK electricity industry

The main commercial features of the UK electricity industry have recently been: More competition between generators, of which there are now 30
More competition in supply since the market was fully opened to competition in 1999. Suppliers are free to compete with each other in supplying electricity to consumers anywhere in England, Wales and Scotland.
 

Our role in the energy sector

We focus on maintaining a low-cost, efficient and flexible generation business in order to compete effectively in the wholesale electricity market. We generate electricity from a wide range of fuel sources. In 2003, 65% of our electricity output was fuelled by coal, 34% by gas and 1% generated by hydro, wind and oil-fired plant. Our efforts to secure a balanced and diverse portfolio of fuel sources mean we're flexible enough to respond to market conditions and to keep costs down. In 2003, our total electricity generation was 42 TWh.  

New Electricity Trading Arrangements (NETA)

In 2001, a new set of trading rules, known as the New Electricity Trading Arrangements (NETA), was introduced in England and Wales. NETA provides the framework for electricity trading and wholesale sales in the UK. The Office of Gas and Electricity Markets (Ofgem) is responsible for overseeing the regulation of NETA. The retail energy market in the UK has consolidated over the last few years into six major competitors, together with some smaller players.  

Acquisitions

In 2002, we bought the UK retail business of TXU Europe Group plc (TXU Energi), together with three TXU coal-fired power stations and certain TXU gas supply contracts. This made us the UK's second-largest energy retailer. It also gave us a better balance between customer demand and generation output, helping to reduce the effect of future fluctuations in wholesale electricity prices on the profitability of our UK business. In 2003, we worked hard to integrate the acquired TXU assets with those of Powergen and believe we're now a strong and effective player in the market. In January 2004, we bought the distribution business of the former Midlands Electricity, effectively doubling the size of our UK distribution network.