Centrica is willing to invest up to £200m (€230m) in the construction of the 480MW Race Bank offshore wind farm, and is in talks with a potential financial partner and the UK government about the project's “economic framework”.
News of Centrica’s efforts to progress Race Bank were included in the company’s 2012 financial results, published yesterday. They also confirm that the 270MW Lincs project – 50% owned by Centrica - is on track for completion during the second half of this year. First power was achieved at Lincs in August 2012. DONG Energy and Siemens Financial Services own the other half of the project.
Centrica’s 2012 results paint a picture of a company whose upstream business is dominated by gas. Last year, it invested about £2bn (€2.3bn) in North Sea gas. It is also active in North American gas production. By comparison, its renewables investments are minor, with the largest of these linked to Lincs, Race Bank and the up to 4.2GW Round 3 Irish Sea zone, shared with DONG Energy.
Centrica describes offshore wind as a “challenging” market, in which few equity investors are willing to take on construction risk. Its future appetite for offshore wind investment will partially depend on greater certainty from the UK government over revenues, it told investors. This is a reference to upcoming changes in the way UK low-carbon electricity generation will be supported via contracts for difference.
£1.2bn (€1.4bn) in revenue was generated during 2012 by Centrica Energy, the division in which the company’s offshore wind business sits. This was 20% up on 2011. By contrast, the division’s power generation was down 20%, to 21.5TWh. No data are available on the 2012 output of Centrica’s offshore wind assets, which is based around 50% stakes in Lynn & Inner Dowsing and Barrow.