Centrica says reviewing new wind farm economics

By Philip Waller

LONDON (Reuters) - Britain's Centrica is reviewing the economic viability of planned wind farms due to soaring costs and the credit crunch, the owner of British Gas said.

Centrica, which is raising 2.2 billion pounds ($3.26 billion) to help fund its proposed 25 percent stake in nuclear power generator British Energy, said it was "revisiting the economics of wind farms given rising raw material and credit costs."

The company, which hopes to start full operation of its new Lynn & Inner Dowsing wind farms off the coast of eastern England by the end of the year, has yet to approve investment for three more farms that it plans to build in the North Sea.

"The costs of building offshore wind are at a very high level," a Centrica spokesman told Reuters.

"This, coupled with the rising cost of credit given the economic situation, means we need to revisit all our numbers to ensure our projects are economic before we give them the go-ahead."

Centrica said in a statement last month that it currently expects to invest about 1.5 billion pounds during the next few years in renewable energy generation schemes.

The company remained committed to developing further renewable generation capacity, provided it could see clear returns, the spokesman said.

Centrica has won government permission for its proposed 250 megawatt Lincs wind farm off the east coast and has said it plans to build two 500 megawatt farms, Race Bank and Docking Shoal, in the next eight or nine years.