Centrica is selling its Race Bank offshore windfarm to Dong for £50 million, after the scheme failed to get early approval for subsidies.

The Department of Energy and Climate Change last month omitted Race Bank from a list of projects eligible for the early enabling contract for difference. It was a major setback for a scheme already teetering on the edge of viability.

Mark Hanafin, managing director of Centrica Energy, said: “This transaction marks the next step in the development of the Race Bank wind farm and we are pleased that the project will continue to progress towards a final investment decision.”

Dong takes on Race Bank, an array of up to 580MW off the Norfolk coast, after the completion of planning and front end engineering and design phases. The Danish-owned company said the site was similar to three others it is developing, all of which made it on the list for enabling contracts.

Benj Sykes, Dong Energy Wind Power UK country manager, said: “We are excited by the potential that Race Bank offers, and it fits very well into our existing plan to develop our extensive pipeline of UK offshore wind projects in the near future.”

Samuel Leupold, executive vice president of DONG Energy Wind Power, added: “I’m confident that given our proven experience in developing and building offshore wind farms and the forward visibility on tariffs until the end of the decade created by the EMR [Electricity Market Reform] – we can turn this into a successful project.”

Centrica retains 50 per cent stakes in three operational offshore windfarms and one onshore windfarm in the UK, with net capacity of 290MW.