Interview: Sam Laidlaw, Centrica's chief believes a nuclear future is the key to securing the UK's energy supply

SAM Laidlaw, the boss of Centrica, has just bought himself a slice of Britain's nuclear future and a visit to Scotland provides an opportunity to impress the case for an energy review on Alex Salmond.

They are meeting high on a hill overlooking East Kilbride to perform the official opening of a training academy for gas engineers. Laidlaw is champing at the bit over the nuclear question and what he might say to the minister who he knows is ideologically opposed to the idea. "We will simply say that there is no low carbon alternative that provides security of supply. If you listen to the environmental groups they have come to the same conclusion," he says.

Laidlaw has just acquired a 20% stake in British Energy, Britain's nuclear operator, and has big plans to expand this side of Centrica's operations. He'd dearly love Salmond's government to embrace the nuclear option.

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But when the time comes the subject isn't even raised. Instead, they talked about the benefits that Centrica's new Energy Academy is bringing to Scotland and how Salmond would like to see it expanded. Laidlaw may have missed his chance to twist Salmond's arm over nuclear power but he did remind his guest that his government isn't paying the same rate to fund apprentices as those down south. If the Scottish Government could find more money, Centrica could employ more apprentices, he said.

Some of the first recruits are now at the new Academy, housed in an undistinguished white block at the Hamilton International Technology Park. It will perform an important role in preparing new engineers to handle everything from fitting a boiler to installing solar panels. Green technology is an important part of the training package for those apprentices who will aim to keep customers happy and encourage them to spend a bit more on the company's range of services.

The CEO's decision to leave his office in London's swanky Mayfair to spend the day at a Lanarkshire business park may owe something to the opportunity to meet Salmond, but it was also a morale-booster to those among the company's 3,500 Scottish employees who might otherwise feel they are on the margins of a huge international business, known to investors as Centrica but to the customers north of the border as Scottish Gas.

The boss could legitimately claim to have a busy in-tray of bigger issues to handle, but he met staff in Edinburgh the night before, and is now familiarising himself with a 2m centre that will train three classes of a dozen apprentices at a time. "A critical part of the business is training and investment in skills. At a time when other businesses are laying off people it is a positive symbol of our commitment," he says, explaining that it will recruit 100 apprentices this year, double the number that went through the old Glasgow Academy, and rising next year to 150. The company receives around 50 applications for every apprentice engineer taken on.

Laidlaw also arrived in Scotland with 1bn of surplus cash that he is keen to spend on acquisitions. It is what remains from a 2.2bn rights issue last December following the decision to limit the amount spent on buying a 20% stake in British Energy from the French power company Electricite de France (EDF). Rumours persist that Laidlaw will spend the leftover cash on a bid for Aberdeen-based oil and gas firm Venture Production in which Centrica has built a near-24% stake. But he has no meetings planned and he hints at an option for investing in other targets as more assets become available. It suggests he may leave the Venture stake as a source of dividend revenue and opt to spread the company's risks.

"We have been saying to our investors that there are a lot more opportunities to go and buy gas reserves than there were 12 months ago. It has become more of a buyers' market," he says, noting that this flush of sellers, including some who are over-leveraged, has put cash buyers such as Centrica in a strong position.

What is focusing Laidlaw's mind is the need to control more of the gas it sells. The UK is increasingly exposed to imported supplies, including a number of unstable sources, and this was one of two key reasons that drove Centrica to buy into the EDF/British Energy partnership. Centrica acquired the stake in BE by handing its stake in Belgian power generator SPE to EDF together with 1.1bn in cash. At the moment Centrica relies on gas-fired stations, renewables and imports and in the short to medium term the deal reduces its exposure to the wholesale gas market and the price it is forced to pay. Centrica shareholders get to vote on the deal next month.

"It is good for our customers because there will be less volatility in sources and that should mean better pricing," he says. "It is also good for shareholders because there will be less volatility in earnings."

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The second key benefit from the deal is that it allows Centrica to participate in the new nuclear environment which, he says, "is going to become more important for security of supply". In just six years the UK has gone from being a net exporter of gas to importing just over a third of its needs. By 2015 gas imports will rise to 75 per cent and five years later to 90 per cent against continued uncertainty over those supplies. The crisis that followed the spat between Russia and Ukraine last year, which saw supplies cut off to some eastern European countries, could easily flare up again. While the UK was not directly impacted by the Russians turning off the taps, it suffered from those Europeans that took alternative supplies from UK storage. A continuing reliance on such sources will only translate into higher prices for customers.

The EDF/British Energy deal will lift Centrica's own gas and electricity output from 35% to 45% and it is targeting 50%. It will have two directors on the board of Lake Acquisitions, the joint venture that owns BE. They are Mark Hanafin, managing director of Centrica Energy, who will be responsible for the company's nuclear business, and Nick Luff, group financial director. There will also be a director on the board of BE to monitor the operating business.

EDF has already announced plans for four new twin-reactor power stations, two at Sizewell and two at Hinkley point and Centrica has the option of taking a 20% share in their development, the first of which would be expected to come on line at the end of 2017.

Scottish and Southern Energy together with Iberdrola and RWE/Eon combination have also formed consortia to bid for sites in the recent Nuclear Decommissioning Authority auction which means that all UK energy suppliers intend to engage in the nuclear growth plan.

Laidlaw, who admits to a fascination with the energy industry, is the son of Sir Christopher, former chairman at BP Oil, who took the young Sam – his first name is actually William – on visits to oil refineries. After schooling at Eton and reading law and economics at Cambridge, he qualified as a solicitor at City firm Macfarlanes and took an MBA at Insead, Paris, before joining Amerada Hess as a corporate planner. He stayed 20 years, leaving as chief operating officer and becoming chief executive of Enterprise Oil, later sold to Shell.

In the three years prior to joining Centrica, Laidlaw was executive vice president of Chevron Corporation, a member of Chevron's executive committee, and was responsible for new business worldwide as well as regional responsibility for Russia, the Middle East and North Africa.

Since arriving at Centrica in July 2006, he has wasted no time unravelling a company that included a number of unrelated assets such as the AA car rescue service to the Goldfish credit card. He focused it on the core purpose of increasing its ownership of gas and electricity assets. The vast Morecambe gas field is in decline, forcing the need for new assets up the agenda. It has built a 24% 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.

Laidlaw has welcomed the changes the Government announced in the budget on the Renewable Obligation, saying it should help make offshore wind more economic.

"The industry is going through a lot of change," he says, "but I believe this company is up to the challenge and that we can meet it fairly quickly."

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