Re Joint Venture
Centrica PLC
CENTRICA ANNOUNCES NEW EQUITY PARTNERS AND UPGRADED TURBINES FOR
LINCS OFFSHORE WIND FARM, IMPROVING THE PROJECT ECONOMICS
Centrica plc, the parent company of British Gas, today announced that it
has agreed the sale of a 50 per cent equity stake in its 270 megawatt
(MW) Lincs offshore wind farm to DONG Energy and Siemens Project
Ventures for a cash consideration of £50 million. As part of this
transaction, Centrica also announced that Lincs has entered into a
turbine supply agreement with Siemens Wind Power for 75 offshore wind
turbines of class SWT-3.6-120. These turbines, which represent an
upgrade to the class SWT-3.6-107 originally envisaged for Lincs, are
expected to generate more power through higher load factors, enhancing
project returns.
At closing of the transaction DONG Energy and Siemens Project Ventures
will reimburse Centrica for 50 per cent of the development costs
incurred to that date. Total investment in the project is expected to be
approximately £750 million, with Centrica’s share being £375 million.
Construction of the Lincs wind farm is planned to commence in 2010 with
first power expected in the second half of 2012.
Centrica, through its wholly-owned subsidiary Centrica Renewable Energy
Limited, will continue to lead development, construction and operation
of the Lincs wind farm. Through its subsidiary British Gas Trading
Limited, Centrica will also enter into a 15 year Power Purchase
Agreement (PPA) to off-take 75 per cent of the electricity production
and 50 per cent of the Renewable Obligation Certificates (ROCs)
generated by the Lincs wind farm. As previously announced, under current
UK Government proposals Lincs will attract 2.0 ROCs for every megawatt
hour (MWh) of electricity produced.
Sam Laidlaw, Chief Executive of Centrica, said: “We are pleased to
welcome DONG Energy and Siemens Project Ventures as equity partners in
Lincs. DONG Energy brings substantial experience of offshore wind
projects. Siemens Project Ventures’ equity investment demonstrates
Siemens' confidence in their latest offshore wind turbine technology.”
Lincs is Centrica’s latest Round Two wind farm and follows the
successful construction and refinancing of the Lynn and Inner Dowsing
wind farms. Centrica’s two other Round Two wind farms, Race Bank and
Docking Shoal, which are awaiting consent, could add a further 1.1
gigawatts (GW) to its renewable energy portfolio.
Completion of the transaction is expected in January 2010.
Ends
Centrica Investor Relations: 01753 494 900
Centrica Media Relations: 0845 072 8001
Notes to Editors:
1. Centrica (Lincs) Limited (CLL), which owns the Lincs wind farm,
reported operating profit in the year ended 31 December 2008 of
approximately £84 million. After taking into account the exceptional
profit arising from CLL’s disposal of a subsidiary, it made a loss of
approximately £2 million for the year ended 31 December 2008. CLL
reported gross assets for the year ended 31 December 2008 of
approximately £104 million. CLL will be renamed Lincs Wind Farm Limited
at closing of this transaction.
2. DONG Energy is one of the leading energy groups in Northern Europe,
procuring, producing, distributing and trading energy and related
products. DONG Energy has a substantial pipeline of development projects
in the UK, which are currently under planning and development.
3. Siemens Project Ventures has invested equity capital in the
development of infrastructure projects worldwide, particularly in the
energy, transport and telecommunication sectors. It is a division of
Siemens Financial Services GmbH, an international provider of financial
solutions in the business-to-business area.
4. DONG Energy and Siemens Project Ventures will acquire the 50% equity
stake in CLL through a jointly controlled company, Lincs Wind Farm
Holdings Limited.
5. Centrica’s joint venture agreement with Lincs Wind Farm Holdings
Limited to govern their ongoing relationship as co-owners of CLL
contains customary rights for each party to acquire the other party’s
shares in CLL in certain circumstances.
6. The Siemens SWT-3.6-120 turbine was released in September 2009. It is
based on the proven technology of the SWT-3.6-107 turbine currently
installed at the Lynn and Inner Dowsing wind farms and features a 120
metre rotor diameter and 58.5 metre long rotor blades. The turbine has a
swept area of 11,300 square metres, equivalent to nearly two football
fields. Siemens anticipates that the new SWT-3.6-120 rotor blades will
enhance the performance of the proven SWT-3.6-107 turbine and typically
generate ten per cent more electricity compared to the SWT-3.6-107.
7. Project investment is calculated net of anticipated proceeds from the
disposal of assets under the offshore transmission regime (OFTO).
