Centrica-backed offshore wind farm planned for 2010

British Gas owner Centrica has announced that construction of its 270MW offshore wind project is expected to begin next year after the project received final approval from investors.

In a further sign that the interest in wind energy projects may be recovering from the impact of the recession, Centrica said the wind farm off the coast of Skegness is expected to cost about £725m and should be operational by the end of 2012.

The Lincs farm will consist of 75 3.6MW Siemens turbines and should be capable of generating electricity for about 200,000 British Gas customers.

The new site will be located near two existing Centrica wind projects at Lynn and Inner Dowsing. The latest wind farm will increase Centrica's interests in renewable projects to approximately 650MW of capacity.

"Our decision to build Lincs illustrates our continued commitment to develop renewable generation and confirms our position as one of the UK leaders in green energy. The government’s enhanced financial framework for offshore wind has been fundamental in improving the overall project economics of this development," said Sam Laidlaw, chief executive of Centrica.

The company also announced that it has agreed to sell a 50 per cent stake in its Lynn, Inner Dowsing and Glens of Foundland wind farms to US-based investment management company TCW for about £84m in cash. The deal values the wind farms at about £460m.

"Profit on disposal of this 50 per cent equity stake will be about £50m. Reported operating profit in the year ended 31 December 2008 from these wind assets was £17m. However, the Lynn and Inner Dowsing wind farms were not fully commissioned until December 2008," Centrica said in a statement.

Laidlaw added that Centrica was committed to developing its renewable business.

"This is a milestone in our renewables strategy and we look forward to working together with TCW, which brings significant global expertise in energy investments,” he said.

The UK wind industry was torn between celebration and commiseration at its annual conference this month after new figures revealed that while the sector now has 4GW of capacity, a record number of planning applications for onshore wind farms are being blocked.

Earlier this month, the British Wind Energy Association (BWEA) signed a deal with representatives from the government's skills programme, designed to provide training for up to 60,000 new wind energy technicians and engineers.

"The task ahead of our sector is enormous, as are the opportunities. If just half the manufacturing for the next generation of offshore wind farms takes place here in the UK, this industry will grow tenfold from just 6,000 jobs today to 60,000 by 2020," said BWEA chief executive Maria McCaffery MBE.

In the US, the American Wind Energy Association reported recently that the sector exceeded expectations during the third quarter of the year, installing 1,649MW of new power-generating capacity and taking total new capacity for the year to more than 5,800MW.