Tarmac has signed what it claims is an "industry first" UK£3.5m deal to buy discounted wind energy directly from the producer and sell it back to its retailer, npower, which will then credit Tarmac’s account.

The Power Purchase Agreement (PPA) will see Nuon Renewables’ wind farm at Pendine Sands, south-west Wales provide approximately 14.3GWh per year of power to quarrying and construction products company Tarmac on an initial trial basis. Tarmac said that following the trial period, it hoped to increase this volume significantly.

Initially, wind energy generated will be pooled into Tarmac’s total power consumption, but the company has the option to use the energy to power specific UK sites if required.

Rob Turner, senior manager for direct material sourcing at Tarmac, said: "As a business it is important for us to continually look at ways in which we can not only become more energy efficient, but also reduce the use of fossil fuels. As part of this focus, we are exploring alternative sources of energy such as wind power."

Tarmac said that signing the contract would guarantee it a supply of renewable energy at a discounted or fixed rate, allowing it to benefit from lower energy costs and avoiding short-term energy price fluctuations.

The deal will also mean that the company is entitled to Levy Exempt Certificates (LECs) from the Carbon trust, which precludes it from paying the Climate Change Levy (CCL) of £4.30 per MWh of energy purchased and consumed.