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United Kingdom

Two UK projects successfully sold -- Enter the giants

Rights to develop two British offshore wind projects have been bought by companies with the financial muscle to build them. Both projects already have planning consents and the promise of government capital grants. They are among the first round of British offshore development permits.

Soon after announcing it was entering the wind business, UK energy giant Centrica acquired an offshore wind station company with rights to a 90 MW project off Cumbria in a joint venture with Danish energy group DONG and Norwegian power company Statkraft. The three companies have bought Barrow Offshore Wind (BOW) from Warwick Energy Limited.

Centrica will own 25% and the other two parties will hold 37.5% each. When built, the wind farm will comprise 30 turbines in the Irish Sea, eight kilometres off Walney Island. The project will cost £100 million, with £10 million funding from a government capital grant. The cost of development will be shared by the three owners in proportion to their equity stakes.

Centrica's subsidiary British Gas will take all the electricity from the wind farm plus the renewables obligation certificates (ROCs). The company announced in July its intention to invest some £500 million equity in 1000 MW of renewables capacity to help meet its obligation. Sir Roy Gardiner, Centrica's chief executive, says the acquisition is a significant step towards establishing British Gas as a major player in renewables. "The location, near to our Morecambe Bay gas field and our newly acquired power station at Roosecote, will allow us to leverage our infrastructure and skills base in the area." Construction is expected to start in 2004 or 2005.

Further north, Powergen Renewables has bought the share capital and rights to Robin Rigg wind farm from Babcock and Brown Ltd. The 60 wind turbines will be sited in the Solway Firth, nine kilometres from the Scottish coast and 12 kilometres from the Cumbrian coast. Powergen already has one offshore wind farm under construction at Scroby Sands off Norfolk. Alan Rayment from Powergen Renewables says: "This is an excellent deal for us, giving us access to a major new project." The project is expected to cost around £200 million and has an £18 million government capital grant. The company does not expect to start construction until 2005.

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