Centrica JV to acquire windfarm

Centrica has entered into a joint venture with DONG, the Danish energy group, and Statkraft, the Norwegian power company, to acquire Barrow Offshore Wind Limited.

Centrica has entered into a joint venture with DONG, the Danish energy group, and Statkraft, the Norwegian power company, to acquire Barrow Offshore Wind Limited (BOW), which has the rights to develop a 90MW offshore electricity windfarm in the East Irish Sea.

Centrica, DONG and Statkraft will purchase the entire share capital of BOW from Warwick Energy Limited. Centrica will hold a 25% interest in BOW and the other two parties 37.5% each.

The intention is for BOW to build 30 wind turbines off Walney Island, near Barrow. Centrica’s subsidiary British Gas Trading Limited will take all of the electricity produced by the windfarm under a long term power purchase agreement, together with the associated Renewable Obligation Certificates. British Gas is the UK’s biggest household electricity supplier with more than 6 million customers.

When fully operational, the windfarm is expected to produce approximately 320GWh per annum, or around 6% of Centrica’s estimated renewables obligation by 2010.

The capital investment cost, assuming the project progresses to completion, together with the acquisition consideration, is currently estimated at approximately £100 million. Of this, £10 million will be funded by a government capital grant. The shareholders expect to contribute to the development costs from existing funds according to their equity stakes. Centrica’s share would therefore be approximately £22.5 million.

BOW has full consent from the UK government to construct and operate the windfarm. It is one of the largest offshore projects in the UK to have obtained such consent and will be around 8 kilometres offshore.

Construction of the Barrow windfarm is expected to begin in 2004 or 2005.

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