Letter from the CEO 

In 2024 we delivered solid financial performance in generally calmer yet intermittently volatile energy markets. Through the year we delivered multiple strategic enablers, with our results demonstrating the adaptability of our business model to uncertainty and volatility in commodity markets. Moving forward, we have positioned ourselves to accelerate our growth journey across key global markets – unwavering in our commitment to deliver on the global green transition and support society through times of disruption.

Markets continue to stabilise with record volumes of renewable generation 
During the first half of 2024, and for the first time since liberalisation of European energy markets, more than half of electricity in European power grids was delivered by renewables. Driving that development are the enormous volumes of solar power that have flooded into the European grid over the last two-decades – with more than 66 GW of new solar capacity installed across Europe in 2024 alone. Whilst the supply situation for natural gas remained stable, with largely full gas storages coupled with declining demand, we have seen prices stabilise but remain above pre-crisis levels, with negative electricity prices on the rise, and intermittently very volatile power markets during periods with scarce renewable production. 

2024 was also the year where European competitiveness and the impact of energy prices took centerstage in Brussels and shaped the new European Commission’s mission. As Energy and Housing Commissioner Jørgensen most recently penciled out in his Affordable Prices Action Plan, the most cost-effective and sustainable path to lowering energy prices is making the necessary investments in renewables and flexible assets that compete in liquid and efficient markets. Over the past two-decades we have made ourselves a key player on both sides of that equation, and through 2024 we continued to reach new milestones across our business.

Delivering commercial growth across Europe and the United States 

Across the Baltics we doubled our renewables under management to surpass 353 MW within just 12-months of operations. Whilst in the Nordics we signed our first optimisation agreement for a co-located wind to green hydrogen electrolyser, followed shortly after by our first battery optimisation agreement in the region.

However, it’s our ambition to support the renewable energy transition far beyond our core European markets. Launching our advanced and automated trading platforms across major energy markets, to support the balancing and integration of renewables and flexibility in a global context. With the expansion of our power trading capabilities to the North American continent, delivering our first power trades in the United States, we’re proud to have taken an important step on that journey.

Scaling our technology platforms while accelerating our talents and future leaders 

Continuing that success means keeping up with evolving scale and complexity that we help tackle through our commitment to excellence in the digital space. During 2024 that meant delivering multiple key platforms to enhance efficiency, scalability, and resilience of our operations, whilst exploring the potential and opportunities presented by emerging technologies, including Generative AI, with our contributions recognised through Centrica being awarded the National AI Award for Energy & Utilities.

We’re not only competing for excellence in our digitalisation and trading operations; the competition to recruit the best and brightest talents and specialists in the energy industry is just as fierce. To support our talent pipeline and development, we continued to build on our partnerships with leading knowledge institutions, whilst rolling out our externally recognised global talent management framework designed to identify and accelerate aspiring talents and future leaders in our organisation.

As we continue moving energy to power the green transition, we will bring our tried-and-tested capabilities to rapidly scale across new markets into play, build on our geographical footprint with a global mindset, and apply our learnings and strategies from new markets to refine the capabilities at our core. Securing excellence in our controls and governance and managing our operations and obligations with integrity and transparency. And ultimately, as a world class energy trading company, playing our role in energising a greener, fairer future. 

Kristian Gjerløv-Juel

CEO, Centrica Energy Trading A/S 

Energy in transformation 

Markets are growing increasingly interconnected and trading demands are shifting. Decarbonisation of energy systems is accelerating the demand for new green products and creating new trading opportunities. And the application of automation and artificial intelligence are unlocking a new pace of growth across our industry.

Following recent years unprecedented volatility in power and gas markets, commodity prices have continued to stabilise through 2024 albeit remaining above pre-crisis levels. Geopolitical developments have reshaped global gas flows, and with Russian pipeline gas removed from the energy mix, the European Union has relied on partners including Norway and the United States to source gas imports, while at the same time enacting policies to curb gas consumption.Thanks in part to renewable energy deployment, measures to curb gas consumption, and mild winters, the EU has successfully managed to reduce gas demand by 20% between 2021 and 2024. As a result, we have seen the supply situation for natural gas remain stable through 2024, with largely full gas storages and liquified natural gas imports declining 19%.

Whilst some of the pressure has lifted from European gas markets, the significant boom in renewable energy deployment is stress-testing power grids like never before, with negative prices and extreme short-term price volatility increasingly becoming commonplace across Europe. The oversupply of solar energy has become a dominating trend across several markets, including the Netherlands, Belgium, France, Germany, and Denmark. 

The German Solar Tsunami

Turning our attention to the largest continental European market, Germany, the rate and scale of solar deployment between 2020 and 2024 has shattered all previous records. In just four years, more than 36GW of new solar capacity was added to the German grid – and without the necessary flexibility to balance surging production volumes during peak solar hours, 2024 saw a record 5% of all hours with negative electricity prices. Negative electricity prices are not an anomaly or market failure – instead, they let us know that markets are working, but the system is struggling to balance rigid supply, inflexible demand, and bottlenecks in the grid. 

While consumers may immediately benefit from free and clean energy, negative prices have a number of negative structural impacts on the market. Most importantly, renewable generators can be made non-profitable; undermining future investments and challenging the ability for existing generators to recuperate operating expenses, while system costs only grow higher. With plans for Germany to reach 215GW of cumulative solar capacity by 2030, the exposure to uncertainty in weather conditions and correlation between intraday price volatility and solar output will only continue to grow, unless flexibility from battery storage, demand response, and stronger interconnectors is prioritised. 

Tempering Volatility with Flexibility

If we look across the Atlantic to sunny California, we can see the potential of flexibility in action. Leading on installed solar with a cumulative capacity exceeding 48GW, California has also taken position as a global leader on the integration of grid-scale batteries in the power grid. From 2018 to 2024, the state expanded battery storage more than twenty-six fold to 13.4GW, and on April 30, 2024, a new record was set, with batteries overtaking both hydropower, nuclear, and renewables as the largest source of supply for a 2-hour period in the evening peak.

Demonstrating the potential for grid-scale batteries to deliver flexibility, the Golden state expects approximately 52GW of battery storage demand by 2045.

Delivering flexibility through infrastructure and policy

Successfully delivering on Europe’s green energy transition means that renewables cannot stand alone. Stronger interconnectors are part of the solution, but fact remains that interconnectors have their limits when markets across Europe share the same issue of being overflooded with solar power. Power grids are demanding flexibility from battery storage and demand response. 

Investments in large-scale battery storage systems and grid infrastructure are critical to taking advantage of renewable resources when we have them, and at the same time, policies need to incentivise making flexibility available to the market and encourage system-friendly behaviours; that means faster permitting, marked-based incentives for flexibility, and dynamic tarrifs. 

We are ready to deliver on what we specialise in – optimising the performance of flexible assets, while understanding the fundamentals that drive movements in the grid and markets. Providing the flexible solutions needed to keep up with supply or demand when the weather doesn’t deliver as expected. Working at the forefront of digitalisation we are evolving the accuracy and speed of our forecasting technologies with the application of cloud computing and artificial intelligence at scale. To maximise the value of renewable generation, we actively work with renewable flexibility, supporting grid balancing and ensuring that our renewable asset owners avoid unnecessary grid penalties. 

Without flexibility we continue to waste cheap and clean energy. Delaying the green transition and our ability maintain global competitiveness in a volatile, uncertain, complex, and ambiguous world of energy. The solutions exist, we just need to put them properly to use. 

Our people drive our

award-winning workplace 

People at the centre of our fundamental five

Engaged and empowered people are the key to our success and sit at the top of our strategic agenda – a key piece in our ‘Fundamental Five’ strategy. Every quarter we ask our people to participate in Our Voice, a survey that provides insights on engagement, wellbeing, and empowerment to ensure that our business is aligned with the needs, expectations, and experience of our people. 

Our Purpose-Driven Culture: The launch of Centrica plc's new overarching purpose, "Energising a greener, fairer future," in March 2024 has been a cornerstone initiative. This purpose unites all business units under a common goal, driving business growth and delivering meaningful impact for colleagues, customers, and communities.

Collaboration and Camaraderie: We foster collaboration through various initiatives such as social clubs, well-being initiatives, volunteering and charitable activities, and Employee Representative Groups, and DE&I. These initiatives have created a highly collaborative community, enhancing trust, respect, and inclusion.

Well-Being Initiatives: We place a signifiant focus on mental and physical well-being. Initiatives like the "FlexFirst" approach to flexible work, fitness rooms, massage rooms, and on-site coaches have significantly contributed to creating a supportive and healthy work environment

Volunteering and Charitable Activities: All our energy movers have 15 hours of paid time off per year to volunteer for causes that matter to them. This initiative has led to a significant increase in volunteering hours, fostering a sense of community and social responsibility among employees.

Employee Representative Groups and DE&I: Our commitment to diversity, equity, and inclusion is ingrained in initiatives like the Centrica Women’s Network (CWN), which promotes development opportunities for women and works on improving policies related to gender diversity and equality.

Together, these initiatives contribute to creating a world-class workplace by fostering a purpose-driven culture, promoting well-being, encouraging collaboration, and ensuring continuous improvement and inclusivity.