UK energy giant Centrica drops EPC approach

UK Energy giant Centrica is to go back to the market again to build its two round one offshore projects -- this time using a multi-contracting approach, says Centrica's Sue Wheeler. The change of contracting strategy comes after the eleventh hour withdrawal of wind turbine supplier Siemens Power Generation, just before an engineer, procure and construct (EPC) contract with Centrica was finalised. Wheeler says the company selected its preferred partner, got board approval and moved to finalise the contract details. "Unfortunately, our partner then withdrew from the process and is no longer prepared to offer an EPC package, so we had to go back to the drawing board," he adds. Centrica's 30-turbine Inner Dowsing and Lynn projects off the east coast of England are among a number of projects in the first round of offshore wind farm permitting in Britain that have been delayed due to the higher than expected costs of building offshore -- particularly for companies that have opted to go the multi-contracting route. Wheeler says that when Centrica first put the two projects out to tender at the end of 2004, the company had a relatively young team that had just been put together. "The EPC contract offered the best route for getting our round one projects away. Since then, the team has been established and is far more capable of taking on the multi-contract route and taking on some of those project management tasks ourselves." The other change during 2005 is equipment supplier strategies. "They are now preferring to only take on risks they are best placed to manage," says Wheeler.