Vertical take-off

As UK supplier Centrica narrows its focus to fund an asset acquisition spree, James Ockenden finds the ‘asset-light’ utility model has finallybeen buried and a move towards ‘vertical integration’ is now thestrategy of choice

Successful risk management in European electricity markets requires owning physical plants on the ground – this is the message coming from every corner of every deregulated retail electricity market. And utilities finding themselves light on assets – such as UK utility Centrica – have now begun a scramble for physical plants.

In July, Centrica surprised analysts by announcing it was to sell its motoring organisation, the Automobile Association, for $3.1 billion to fund acquisitions in