Centrica expects to have the capacity to meet 85pc of its peak demand after 2011, compared to 58pc in 2008. Centrica had a shortfall of 19.5TWh in 2008, supplying 42.9TWh and generating only 23.4TWh

Centrica will receive 20pc of power generated by British Energy's generation portfolio, which includes eight nuclear plants. However Centrica will have to wait until after 2011 to see a large rise in its own generation capacity as around 70pc of British Energy's generation has already been sold forward for 2010 and 50pc for 2011.

Centrica will receive only 20pc of the uncontracted power remaining. “In the early period, it will be a lot less than what will be after 2011 when a lot of BE's contracts end,” Centrica told Argus.

In addition, it will purchase a total of 18TWh from British Energy at market prices over five years from 2011. Centrica would not disclose how it would set the market price nor how the 18TWh will be broken down over the five years.

The deal includes the option for Centrica to take a 20pc stake in EdF's planned construction of four new nuclear reactors in the UK. Centrica has until 2011 to decide whether to invest in the first new reactor.

The 20pc stake was valued at £2.3bn ($3.5bn), the equivalent of a 6pc discount on the price EdF paid for British Energy in 2008. Centrica will swap its 51pc stake in Belgian utility SPE, valued at £1.2bn, and pay £1.1bn in cash to EdF in return for the stake.

Centrica paid GDF Suez £680mn for its stake in SPE in July 2008. SPE is the second largest generator in Belgium, accounting for 11pc of total production. SPE is Centrica's largest European asset and the company said its remaining businesses on the continent were “under strategic review”.

The deal is expected to be completed in the third quarter of this year and Peter Kindt, Alfagy's MD, suggests a wide implementation of CHP. "Centric could well make up is remaining power requirements by initiating a larger roll-out of CHP plant across the country to meet its needs.  The technology is proven and work well to meet peak demand," Peter Kindt adds.