British Gas's parent company Centrica today announced it will build a new offshore wind farm in UK waters which will provide enough electricity to power around 200,000 homes.
Centrica is investing £725m in the 75-turbine wind farm five miles off the Lincolnshire coast from Skegness, next to the company's existing developments at Lynn and Inner Dowsing which power 130,000 homes.
Construction of the 270MW renewable energy site will begin in 2010 and should start generating electricity towards the end of 2012, bringing the company's total installed renewable capacity to 650 MW.
Centrica said the Government's decision to increase the financial incentives for offshore wind had been "fundamental" in enabling the project to go ahead.
The company also announced it was selling a 50 per cent stake in its Lynn, Inner Dowsing and Glens of Foudland wind farms to US-based investment management company TCW for £84m and had agreed a refinancing deal to raise a further £340m in funds for new projects.
Sam Laidlaw, chief executive of Centrica, said: "Our decision to build Lincs illustrates our continued commitment to develop renewable generation and confirms our position as one of the UK leaders in green energy.
"The Government's enhanced financial framework for offshore wind has been fundamental in improving the overall project economics of this development."
Following Centrica's announcement, Energy and Climate Change Secretary Ed Miliband said: "This is another vote of confidence in our decision to review the incentive for offshore wind earlier this year and a clear example of how government intervention can drive the energy generation market towards low carbon.
"We're currently the world leader in offshore wind and with the addition of Lincs we will increase our lead as well as our renewable energy generation."