The £8m A7 Lochhead development, near Stonehouse, will provide the retailer with enough wind-generated energy to power four stores.

It is the first time in the UK a company as large as Sainsbury's has made a deal directly with a generator rather than an energy company.

Work at the Lochhead farm is due to be completed by summer 2009.

The Power Purchase Agreement means the retailer will purchase energy direct from A7 Lochhead for the next 10 years.

Power Purchase Agreements are an innovative way that independent generators can get renewable energy projects off the ground

Alex Hensher

A7 Energy

Wind-generated power from the plant will displace about 65,000 tonnes of carbon from fossil power stations and provide at least 1% of Sainsbury's energy demand each year, the equivalent of powering four stores.

It has been hailed as a model deal on which other renewable projects can secure funding.

Neil Sachdev, commercial director at Sainsbury's, said: "Customers expect us to do everything we can to minimise our impact on the environment, and this new deal is the next stage in our plan to become even more environmentally-responsible as a business.

"Lochhead was able to find the funding to build this wind farm because we agreed to buy the entire output in advance, meaning we are responsible for a new source of renewable energy to help cut the UK's dependence on fossil fuels."

Alex Hensher, founder of A7 Energy, said: "Power Purchase Agreements are an innovative way that independent generators can get renewable energy projects off the ground, whether they are biomass, waste-to-energy or, in this case, wind turbines. "

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Source: BBC