Wind News

Thursday 25 February 2010

Centrica sold a 50% stake in the Lynn and Inner Dowsing wind farms in October

Centrica generated almost 50% more power from renewables last year than 2008, according to figures released today (February 25), but power from wind still accounts for a small portion of the company's overall production.

Results for the French-owned company published today show renewables accounting for 821GWh compared to 548GWh in 2008, almost wholly from Centrica's five operational wind farms.

But this equated to just 3.26% of an overall generation figure of 25,152GWh, which amounts to a less than 1% rise on last year.

Overall, Centrica's operating profits fell to £1,857 million, a decrease of 7% on last year's £2,003 million, while its upstream business, which encompasses the wind portfolio, also fell from £881 million to £525 million due to lower gas prices.

Despite this, chief executive Sam Laidlaw called 2009 "a year of significant achievement for Centrica."

Wind

Over 2009, Centrica has pursued a strategy of refinancing its wind and renewable assets. Planning consent applications for projects at Docking Shoal and Race Bank in the Greater Wash area have been submitted, which the company claimed would add 1.1GW to its wind portfolio.

In December, the company sold a 50% stake in the Lincs wind farm to a joint venture of DONG Energy and Siemens for around £50 million in incurred development costs, although it remains the leading partner in the project (see this NewEnergyFocus.com story). Construction on the 270MW wind farm is expected to begin later this year with a targeted completion date of 2012.

Two months earlier, Centrica received final investment approval for the scheme, which is anticipated to cost £750 million to build.

Also in October, it sold a 50% equity stake in the Lynn, Inner Dowsing and Glens of Foudland wind farms to Trust Company of the West (TCW) for a cash consideration of £84 million (see this NewEnergyFocus.com story). Centrica subsequently entered into agreements to raise approximately £340 million of non-recourse project finance and entered into 15-year Power Purchase Agreements (PPA) to off-take all of the electricity production and 50% of the ROCs generated by the three refinanced wind farms.

And, at the start of this year, the company was awarded development rights to the Irish Sea zone in Round 3 of The Crown Estate's offshore wind licensing. The zone is estimated to have s potential capacity of 4.2GW; although Centrica said development is unlikely to begin until at least 2016.

In a note accompanying the results, Mr Laidlaw said these moves supported the company's priorities and move towards diversification.

He wrote: "The progress made in 2009 supports the strategic direction of our power generation business as we aim to...diversify the generation mix with a focus towards lower carbon intensity and build on our leading position in renewable generation."

Subsidiaries

Centrica's has made further inroads into the renewables sector through its subsidiaries.

Earlier this month, British Gas announced the go ahead of five biomethane demonstration projects that it claimed would be the first technology of this type to inject gas into the grid.

British Gas also acquired a 19% stake in biomass heating company Econergy Ltd in April 2009 (see this NewEnergyFocus.com story) and now plans to create 1,100 new jobs in 2010 to capitalise on the emerging energy efficiency market.

And, in September 2008, it spent £2.8 million purchasing Solar Technologies, which designs and installs building-integrated solar PV.

Mr Laidlaw said he was happy with the company's overall direction.

"Centrica is well-positioned to pursue growth opportunities and lead the drive to a low-carbon world, whilst maintaining the financial discipline to secure strong returns on our investments," he said.