Centrica today announced plans to invest £725m in building a new 270MW wind farm off the coast of Skegness.
The Lincs wind farm will consist of 75 3.6MW Siemens turbines and will be constructed next year, with operations expected to begin at the end of 2012.
Once complete, Centrica claims the wind farm will be capable of generating electricity for around 200,000 homes.
The offshore transmission assets for this project will be built by Centrica and the cost will be recovered post construction through an auction process.
Centrica expects the costs related to the assets to amount to approximately £230m, in addition to its own investment in the wind farm itself.
The group has also confirmed the £460m sale of its 50 per cent stake in the Lynn, Inner Dowsing and Glens of Foudland wind farms to US-based investment management firm, TCW.
The sale will raise £86m in cash and a potential further £340m of non-recourse project finance facilities from a consortium of banks. Additional profit on disposal of the 50 per cent equity stake will be around £50m.
Sam Laidlaw, chief executive of Centrica, said: ‘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.’
Under current government proposals, Lincs will attract two Renewable Obligation Certificates (ROCs) for every megawatt hour (MWh), helping Centrica to reach its renewable energy goals.
Once the Lincs project is complete, the group is expected to have equity interests in operating renewable energy projects with an installed capacity of 650MW.
Laidlaw added: ‘The refinancing and equity sale of part of our existing wind portfolio underlines the quality of the operational assets and creates a structure for recycling Centrica’s capital and mobilising third-party funds efficiently. 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.’