Npower joins the gang with a 7% gas price cut

Published 10th Mar 2010

Npower became the fourth of the UK’s big six energy companies to cut its prices yesterday, reducing its gas bills by 7 per cent in a move that will benefit about two million households.

The cut, which will take effect from March 26, will wipe about £50 off the average annual bill to about £1,196 for standard dual-fuel customers of the group, which is owned by Germany’s RWE.

The move comes after smiliar moves by British Gas, Scottish and Southern Energy (SSE) and E.ON. They reflect steep falls in wholesale gas prices, which have declined from more than £1 a therm in mid-2008 to less than 40p.

Last week Scottish and Southern Energy announced a 4 per cent cut to gas bills after a 7 per cent reduction by British Gas, while yesterday E.ON cut gas prices by 6 per cent. The remaining members of the “Big Six”, EDF Energy and ScottishPower, have yet to reduce their prices.

Kevin Miles, chief executive of npower retail, said: “We always aim to offer competitive prices to our customers and we have lowered our gas prices although our profits halved in 2009. The combined profit from supplying nearly 6.8 million accounts and operating nine power stations was equivalent to just 9p a day for each customer account.”

Npower also introduced a new discount of £10 a year for dual-fuel customers who pay on receipt of their bill.

The price cut came as npower announced plans to invest a further £100 million in one of its gas-fired power stations. The upgrade of turbines and other equipment at the Little Barford Station in Cambridgeshire will cut emissions from the station by about 40,000 tonnes of carbon dioxide a year.

The investment in the station, which has been operating for 14 years, will also boost its potential net output to about 700 megawatts, enough power for some 800,000 homes.

Kevin McCullough, chief technical officer for RWE npower, said: “This project will increase power output as well as cutting the station’s carbon footprint — ensuring that we will be in the best position to provide reliable power generation into the future.”

The upgrade to the gas turbines will be carried out by GE.

Magued Eldaief, GE Energy’s UK managing director, said: “As part of this upgrade, we are excited to be providing our latest gas turbine technology, which will enable Little Barford power station to deliver energy more cleanly and efficiently to its customers. This important project further strengthens the relationship between RWE npower and GE Energy in the UK.”

RWE is building new gas-fired power stations at Staythorpe in Nottinghamshire and Pembroke in South Wales.

Source: ' Times '

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