by Michael Smith
Centrica plc, through its British Gas New Energy division, and Econergy, today announced that Centrica has acquired 19 per cent share of Econergy Ltd, for a cash consideration of £1 million.
Econergy is a leader in biomass heating, which replaces fossil fuels with renewable energy sources for combustion to produce heat. Econergy sells, designs, installs and maintains systems for public sector, businesses and domestic properties. It also provides community heating solutions in the form of district heating systems and operates biomass heat supply contracts. Econergy has sold over 300 biomass boilers to date across Great Britain.
This investment follows the Nov 2008 Energy Act which will bring substantial financial support for heat from wood boilers by 2011 through a Government Renewable Heat Incentive (ie payment to wood boiler owners for heat delivered). The Government believes that the market will grow to 8% of all heat by 2020 which is the equivalent of heating over 3 million homes (although much of it will actually go to schools, council buildings, offices, hospitals etc.).
British Gas is the largest supplier of energy to homes and commercial buildings in the UK, with 15.6 million domestic customers and 1 million Business Accounts. Through it’s Services business, it also has over 8,000 service engineers across the country with 8 million customers on service or insurance based contracts. Centrica has recently raised £5 billion for new investments in renewable energy, energy saving, gas production and nuclear sectors. The British Gas New Energy Division (a relatively small but rapidly growing team) focuses on building integrated renewable energy and energy saving (loft insulation, cavity walls insulation etc.).
Gearóid Lane, Managing Director of British Gas New Energy said: “This investment is another step forward in our development of a broad range of renewable, energy efficient and low carbon technologies that we can offer our customers, helping them use less and use cleaner technology”
Chris Miles, Managing Director of Econergy Ltd continues: “With the backing of British Gas, we are now in a position to meet the substantial increase in demand for biomass heating in the coming years. In addition to growing our project delivery and distribution business, we plan to accelerate the growth of our nationwide service and heat supply offering.”
While this is being lauded by both Centrica, e.g. British Gas, and Econergy Ltd as a good thing one can but wonder whether this is going to be thus. More ofte nthan not when the big players acquire any kind of stake in an eco company they have other ideas in mind than those of the company they buy into.
On can but say to Econergy Ltd: “Beware of the Trojan Horse!”
© M Smith (Veshengro), 2009
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British Gas New Energy to acquire 19 per cent stake in Econergy Ltd
