We operate a generating plant portfolio of 6,400MW fuelled mainly by coal and gas. Looking forward, our strategy is to expand our sustainable generation sources significantly. In April 2006, we received final planning approval to construct Europe’s largest on-shore windfarm, the 322MW Whitelee project located south of Glasgow. The business now operates, or has planning approvals for, more than 80% of our 2010 target of 1,000MW.

We purchase fuel for our power stations and gas for our domestic customers by negotiating competitive prices. This includes the negotiation and management of long term power and gas contracts. For example, in 2005 a 10-year gas contract was signed with Statoil providing sufficient gas for 250,000 homes annually and improving security of supplies as the UK becomes a net importer of gas.

Our Hatfield Moors gas storage site gives us greater flexibility to meet the peak requirements of customers and to respond to the volatility of gas prices between midweek and weekends.  Our bulk gas contracts give us further flexibility by allowing us to respond to market peaks by either using the gas to generate electricity in our own power stations or to trade it through the open market. We operate a major pumped storage facility at Cruachan Power Station and have the capability to flex our coal and gas plants to respond swiftly to trading opportunities.

Our key challenges include:

• Investing in our assets to meet the challenge of energy security and climate change
• Continuing dialogue with the Government in relation to energy policy
• Delivering our challenging renewable targets for windfarm construction
• Controlling power station emissions to meet latest environmental standards
• Securing long term access to competitively priced gas

Our key operational objectives for the Energy Wholesale business are:

• World Class Health & Safety
  protecting employees, contractors and members of the public from harm
  
• Trusted With The Environment
  developing a reputation as an environmentally responsible developer and operator of energy generation assets 
  
• Maximise Value
  delivering a return on assets that is consistently top of the sector
  
• Anticipate and Realise Opportunities
  reacting quickly to opportunities and maximising value creation
  
• Operate Sustainable Processes
  implementing clear, consistent, efficient and effective processes that are understood and allow us to measure and improve performance
  
• Outstanding People Experience
  supporting a high performance culture that nurtures and recognises talent and inspires achievement at all levels