Source says NRG may buy Bluewater Wind

INDIAN RIVER — Bluewater Wind expects a controlling interest in the firm to be sold in the next few weeks, and sources familiar with the plan say the company is in serious negotiations to sell to NRG Energy Inc.

In selling a majority stake in the offshore wind farm company, Bluewater would get the immediate financial help it needs to keep its projects moving forward, and the backing of a large energy company that should ease the financing of billion-dollar wind farms.

Bluewater needs a new infusion of money because its current majority owner, the Australian investment holding company Babcock and Brown, was ravaged by debt during the global economic meltdown.

Babcock International, the subsidiary that owns Bluewater, is selling off its assets over a two- to three-year period.

Rob Propes, Bluewater’s project director for its planned Delaware wind farm, declined to comment about the identity of companies the firm is talking to about the sale of a “fully controlled interest.”

A sale would include all of the projects in Bluewater’s development pipeline, among them the planned wind farm off Rehoboth Beach, a similar venture planned in New Jersey and proposals in other states, he said. Propes said Bluewater expects to announce a deal in the coming weeks.

“Bluewater Wind is moving forward to close a deal with our investor, and no deal has yet been signed,” Propes said. “We will let our supporters know when we’re ready to announce that a deal’s been reached.”

Babcock spokesman Matt Dallas had no comment. David Knox, communications director for NRG, also declined to comment. “Nobody here’s going to be able to comment on anything that’s a market rumor,” Knox said.

But several sources familiar with the talks said a field of potential buyers has been narrowed to NRG, and the two companies were working to complete a deal. No firm commitments have been signed.

Such a deal, if culminated, would pair Delaware’s most prominent clean energy project with one of the state’s most prominent polluters. NRG, based in Princeton, N.J., owns the coal-fired Indian River Power Plant, which long has ranked among the state’s major air-pollution sources. A $500 million pollution reduction effort is under way there.

An investment in Bluewater would mesh with a strategy NRG Chief Executive David Crane discussed in an interview with Reuters in August. He said NRG wants to be involved in an array of renewable technologies, including offshore wind on the East Coast, and solar.
He said offshore wind in the East would be as potent an energy source as solar thermal energy in the Southwest. Land-based wind “is going to be treading water, until they can get transmission out of the Dakotas and into Chicago,” he told Reuters.

NRG has two land-based wind projects in Texas, but its power generation portfolio features mainly coal, natural gas and oil plants, as well as one nuclear plant, providing enough power to serve 20 million homes. It also is hoping to build new nuclear plants.

NRG built and operates the wind farms under the name Padoma Wind Power. It has a third Texas wind farm under construction, and six more planned in Texas, California and New Mexico.

Bluewater’s primary asset is a 25-year power purchase contract with Delmarva Power, the only known contract for offshore wind power in the nation. There are no wind turbines off the United States coast, although they are common in Europe.

At last count, the Bluewater project would have at least 79 turbines and be sited about 14 miles off the coast of Rehoboth Beach. It would generate enough electricity to power 55,000 homes. It could be the first commercial-scale U.S. offshore wind farm.

A controlling stake in Bluewater was acquired by Babcock in 2007. Its deep pockets were supposed to bolster the project, which Bluewater officials in September estimated would cost at least $1 billion.

But Babcock, laden with debt, was hurt badly in the global economic meltdown.

Bluewater President Peter Mandelstam said in September that Babcock would be out of the project by the year’s end. It is unclear how much of Bluewater is now owned by Babcock, and how much is owned by Mandelstam. In September, Mandelstam said he and Babcock were funding the business. Propes would not elaborate Friday.

The News Journal

www.gobeachcomber.com

31 October 2009

Tags: Wind power, Wind energy

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