Centrica Says Wind-Farm Talks Continue After Report of Ax
Centrica Plc (CNA) said it remains in talks with the U.K. government on investing in an offshore wind farm after the Telegraph reported that the utility may abandon the project unless it gets increased state support.
Centrica hasn’t made a final investment decision and is still trying to “make it work,” Greg Wood, a spokesman, said today by telephone.
The Telegraph said yesterday that the 2 billion-pound ($3.2 billion) Race Bank venture off eastern England may be axed because government support for offshore wind is too low. That may further inflame debate about appropriate subsidy levels for renewables at a time when Britain is studying how best to meet binding clean-energy goals.
Centrica said in February it was in talks with a financial partner it didn’t name to develop the 580-megawatt Race Bank project and was prepared to commit 200 million pounds to the venture.
Race Bank may supply more than 450,000 homes a year when built, according to the Windsor, England-based utility. The company plans to make a final investment decision next year, according to documents published on its website last month. It said in July 2012 it planned to decide early this year.
Four of Britain’s six biggest energy suppliers raised prices last month, citing renewable-power subsidies among reasons for the increase in customer charges. That prompted Prime Minister David Cameron to order a review of green levies.
The U.K. in June said offshore wind farms will receive 155 pounds a megawatt-hour starting next year, about triple the market price for electricity. The subsidy declines to 135 pounds by 2018. Electricite de France SA, which last month agreed to build the Hinkley Point C nuclear plant in southern England, will earn 92.50 pounds a megawatt-hour for 35 years. Centrica pulled out of Hinkley Point in February over costs.
Energy Minister Michael Fallon is still studying responses to the consultation over draft subsidy levels and may increase them, the Telegraph reported, citing the minister. A final determination is expected in December, Centrica’s Wood said.
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