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Centrica Completes Renewable Energy Divestment

23 Jan 16:00 by Steve Walia

Offshore Wind Turbines

Centrica has concluded its stint in renewable energy production by selling off the last stake in its final offshore wind farm. The deal is worth £487 million and will see the asset transferred to the Green Investment Bank.

It marks an end to Centrica's time as a producer of wind power, after a year-long retreat that saw the company sell off stakes in two additional wind developments in Lincolnshire and Aberdeen.

The utility giant said that it would receive proceeds of £220 million from selling its 50pc stake in the Lincolnshire wind farm project located off the coast of Skegness.

Siemens, Centrica's partner in the project, will also look to sell off its quarter share, but Dong Energy, the Danish green energy giant, will retain ownership of its 25pc stake.

The wind power exit forms part of Centrica's strategy to move towards customer-focused activities and away from large-scale commercial energy production. The strategy was first shared in 2015 and is set to net the company billions of pounds.

The company originally said that it hoped to free up a billion pounds of funding by selling off assets in its North Sea business arms and wind energy ventures.

By 2020, it plans to be funnelling £1.5 billion into the supply of advanced efficiency services to business energy customers and supporting smart home technologies.

The CEO of the company, Iain Conn, described the change in strategy after moving into the role two years ago. He said the the aim was to reposition the utility firm in a rapidly changing utilities market. Subsidised renewables have put conventional power plants under pressure, diminishing their earnings and lowering investment. 

Centrica has been heavily exposed to this and the downward price pressures from falling oil prices. Its share price has dropped over 40pc since 2013.