National Power invests pounds 1bn in US stations

NATIONAL POWER yesterday embarked on the most ambitious stage yet in its overseas expansion by announcing plans to invest pounds 1bn in new gas-fired stations in the US over the next three years.

As a first step, National Power is to invest up to $400m in building a 1100-megawatt combined-cycle station in Texas, Dallas. Three or four such stations are planned in Texas, New England and other parts of the US.

The pounds 1bn programme will raise National Power's overseas investment to more than pounds 2bn. The Texas investment will give the company interests in 12,000 megawatts of capacity overseas, compared with 16,000 megawatts of power stations in the UK.

A spokesman denied that the move marked a change in its international strategy away from investing in existing power stations in emerging markets. He said that 80 per cent of the company's overseas investment was in the developed world.

National Power also said that it remained interested in buying one and possibly more electricity supply businesses in the UK.

It may make a bid for London Electricity, which has been put up for sale by its US owner, Entergy. But if successful, National Power would then sell off London's distribution arm - the monopoly wires business - and seek to merge the supply arm with that of another regional electricity company.

National Power has reached an agreement for Texas Utilities to take nearly all the output of the new Texas power station for two years.

Keith Henry, chief executive of National Power, said that Texas was one of the best electricity markets in the US.

It is an "island market", meaning there is little competition from generators in other parts of the US and that electricity prices in the state are set by older more expensive gas plants.