Centrica, the UK's largest energy supplier, has announced that it is to begin construction on the country's first major new power station in five years.
The 885 megawatt gas-fired power plant in Langage, Devon, will begin commercial operations during the winter of 2007/08, the company said in a statement.
Centrica, which owns British Gas, confirmed that it was investing £400 million in the project.
It said that the new power plant, which will be able to provide electricity for more than one million homes, would come online as existing power generation sources continue to decline over the next few years.
Announcing the construction of the new power station, Centrica's chief executive, Sir Roy Gardner, said: "Faced with a volatile wholesale energy market and a predicted reduction of power generation sources in the UK over the coming years, this major investment signals Centrica's commitment to secure the future energy needs for our British Gas customers."
The energy minister, Malcolm Wicks, welcomed the decision, claiming that the investment by Centrica would help secure the future energy needs of UK consumers.
"Langage will contribute towards the UK's security of supply as new and more efficient power stations are needed in the coming years to replace existing plant," said Mr Wicks.
In a separate statement, Centrica confirmed that its trading was in line with expectations.
The company said that it continued to trade in line with earnings guidance issued at its May 19th annual general meeting and a further update on June 8th, when the energy supplier announced that its 2006 earnings might be reduced by a penny a share because tax rises across the year could increase beyond forecasts.