Please advise how to fix this error
Error Generating XML: Specified XML file is not writable.

Hi,
Make sure that JoomSEF is allowed to create and write to file sitemap.xml in your website's root directory. The easiest solution is to create the file manually and set its permissions as required.

sorry please could you be a bit more specific. I am not sure how to do exactly what you say.

You need to connect to your web server using FTP and create a new file in the website's root directory called sitemap.xml. Then set the permissions for the file to be writable by any user (so JoomSEF has access to it).
For more information please refer to your FTP client documentation, or Google for FTP and file permissions.
We could also do it for you as a paid service, see: www.artio.net/e-shop/support-services/joomla-related-support-1h