Centrica's move into nuclear suggests name change to British Energy

Published on Saturday 14 November 2009 12:09

CENTRICA, which trades as Scottish Gas and British Gas, could be lining up a change of name following its move into the nuclear sector.

It has emerged that when the company bought a 20 per cent stake in British Energy from lectricit de France (EDF) earlier this year it also acquired an option to buy the British Energy brand.

The company has two years to mull over the prospect of acquiring the name and what to do with it, and a complete change of identity to British Energy has not been ruled out.

Sources say there would be at least two good reasons for adopting the name.

First, it would reflect its expanded role into the wider energy market. It has built a 24 per cent stake in the UK electricity market from a standing start ten years ago and is now a big investor in the renewables sector, owning onshore and offshore wind farms in England and Scotland.

A second benefit would be that BG Group, the exploration and extraction company which was demerged from British Gas in 1997, retains the right to use the British Gas name outside the UK. Centrica can only use it within the UK. This causes confusion among overseas clients.

According to a gas industry analyst Centrica offered to buy the British Gas brand from BG but was put off by after being quoted what was described as a "nine-figure sum".

The Centrica name has also struggled for acceptance despite the company being the biggest retailer of gas in the UK.

Acquiring the stake in British Energy and its acquisition of Venture Production lifted Centrica's self-sourced gas and electricity output to 60 per cent.

It paid for its holding in BE by handing its share in Belgian power generator SPE to EDF, together with 1.1bn in cash.