Centrica and Dong Energy have formed a joint venture (JV) to develop offshore wind farms in the Round 3 Irish Sea Zone, which has a potential capacity of 4.2GW.
As per the transaction, Centrica will receive up to £40m in cash from Dong Energy for a 50% share in the JV, out of which the latter will pay £15m at closing of the transaction and balance in later years contingent upon consent and finalisation of a project in the Irish Sea Zone.
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Centrica Energy managing director Mark Hanafin said creating this joint venture with Dong Energy is a logical step that will combine both companies’ expertise and scale to help realise the full potential of the zone.
"The partnership forms part of our strategy to deliver value from our growing upstream business," Hanafin said.
Centrica Energy Renewable Investments, the special purpose vehicle established for owning and managing the activities, assets, liabilities and commitments related to the Round 3 Irish Sea Zone, will be 50% owned by Dong Energy.
Centrica Energy Renewable Investments will be renamed as Celtic Array Limited upon completion of the transaction.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataBoth firms together have around 1GW of offshore wind capacity installed or under construction in the UK, and already hold joint interests in the Barrow and Lincs offshore wind farms.
The JV will develop different projects in the zone on a 50/50 basis with construction management of the projects alternating between the parties.
A final investment decision for the first project under Centrica’s management is expected in 2016.
Dong Energy acting CEO Carsten Krogsgaard Thomsen said the JV marks the company’s second entry into a Round 3 project.
"It is a strategic addition to our long-term pipeline of projects which contributes to the industrialization of the offshore wind business and bringing down costs," Thomsen said.
The Irish Sea Zone was awarded to Centrica in January 2010, as part of The Crown Estate’s Round 3 offshore wind tendering process.
