Soaring costs have forced British Gas owner Centrica to postpone building a giant £750million offshore wind turbine farm. This is the latest setback for the Government, which is relying on wind power over the next decade to help the UK achieve tough green energy targets. Last week, Spain’s Iberdrola, the world’s biggest investor in wind power, admitted that investment in the UK would fall by 40 per cent this year. Centrica is still keen for the 250 megawatt wind farm near Skegness, Lincolnshire, to be developed, but the board will not sanction the move because of rising costs. The company has a £4billion war chest to spend on wind projects over the next five years and it still hopes it will be able to go on to become the country’s largest wind power investor and operator. Centrica has all the permission necessary to build the wind farm, which would be capable of supplying 170,000 homes, but the price of turbines, which are made overseas, continues to soar because of the weak pound, while engineering costs are escalating as steel prices rise.

In an attempt to kick-start the investment, Centrica and the Government have been in talks aimed at giving industry a bigger incentive to develop wind farms. The group wants Whitehall to offer increased concessions under its wind subsidy programme. Under this scheme, for every unit of green electricity a company produces, it receives a credit from the Government that can be used to offset charges it faces from any electricity it uses or produces from ‘dirty’ plants such as coalfired power stations. Energy Minister Mike O’Brien is said to be determined to create the conditions that will allow the wind industry to go ahead with its investments, without which the UK would miss its climate change targets.
Tomorrow he will spell out how the Government will further encourage the industry by offering generous research and development grants for a new generation of giant wind turbines. He will also say he is working with the Treasury to come up with more financial inducements to attract investment. 

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