[ exact phrase in "" • ~10 sec • results by date ]

[ Google-powered • results by relevance ]

LOCATION/TYPE

News Home
Archive
RSS

Subscribe to RSS feed

Add NWW headlines to your site (click here)

Sign up for daily updates

Keep Wind Watch online and independent!

Donate $10

Donate $5

Selected Documents

All Documents

Research Links

Alerts

Press Releases

FAQs

Publications & Products

Photos & Graphics

Videos

Allied Groups

Proposed wind farm gets gust of money  

A proposed 150-turbine wind farm off Rehoboth Beach got a shot of financial steroids Thursday, after a global energy and investment company bought control of project developer Bluewater Wind LLC.

Australia-based Babcock & Brown acquired “a majority controlling stake” in Bluewater’s business, according to both companies, giving the smaller Bluewater backing from a company with $50 billion in assets worldwide.

Word of the ownership change arrived as the Public Service Commission was slogging through Bluewater’s proposal for a more than $1.6 billion, 450-megawatt project that would supply Delmarva Power under a long-term contract. The commission could issue a recommendation on Bluewater’s proposal and a related plan for a backup natural gas power plant in Sussex County as early as mid-October.

“It certainly negates any fears that Bluewater Wind is an unknown or a fly-by-night,” said Philip Cherry, a Department of Natural Resources and Environmental Control manager and one of four state agency representatives on a PSC review panel.

“Babcock & Brown is a huge company and a big wind developer,” Cherry said. “I think clearly that enhances Bluewater Winds’ proposal to have a company of this stature backing them and in partnership with them.”

Although Bluewater has never built an offshore wind farm, its contractors and consultants have built offshore plants in Europe. Babcock & Brown brings wider experience to the table.

Delmarva Power pointed out late Thursday that Babcock & Brown recently abandoned a larger offshore wind project in Texas because of high costs and the availability of lower-priced alternatives, including land-based wind power.

“We continue to be concerned about the cost of this project, because our customers would have to carry the cost in their monthly bills for 25 years,” Delmarva spokesman Bill Yingling said. While Delmarva is still reviewing Bluewater’s terms, Yingling said, “information continues to suggest that there are important alternatives that should be considered in this process.”

Babcock & Brown owns or operates more than 1,700 megawatts of wind energy projects, including 850 megawatts in the United States. Another 4,200 megawatts are in development worldwide, the company said.

Approval in Delaware could make Bluewater this country’s leading offshore wind producer. Another large-scale U.S. offshore wind project is under consideration in Massachusetts. Two others, including the Texas venture previously backed by Babcock & Brown, were shelved this summer because of high costs.

“Bluewater’s success to date in Delaware and the positive feedback it has received in other states has convinced us that joining forces with Bluewater is the best course toward achieving our goal of commercializing offshore wind in the U.S.,” said Hunter Armistead, head of Babcock & Brown’s North American Energy Development Group.

State reviewing issue

Bluewater’s original management team will continue to direct the Delaware project.

State officials were more cautious about the possible impact of Bluewater’s purchase by Babcock & Brown.

“Certainly there are credit issues and project viability issues that play a role in the analysis,” PSC Executive Director Bruce Burcat said. “I can’t say without us doing a lot more review what kind of impact this will have.”

Delmarva earlier this month said that it was unable to agree on key terms of Bluewater’s latest offer, saying the plan appeared to create “unacceptable costs and risk” for its customers.

Details on Bluewater’s potential cost to Delmarva’s customers have yet to be calculated or made public.

State lawmakers ordered Delmarva Power to seek new, in-state sources of electricity to stabilize prices and supplies last year. The move touched off a months-long frenzy of studies, bidding, reviews and quarrels over electricity supplies and the costs of energy sources cleaner than conventional coal, oil and natural gas.

Bluewater originally proposed a 200-turbine project, but scaled it back to 150 during talks with Delmarva following a vote by the PSC and four state agencies charged with selecting the project.

Markian Melnyk, a Washington, D.C., attorney who specializes in utility and regulatory issues and who is writing a book on the wind power industry, said Babcock & Brown could improve Bluewater’s chances.

“I think Babcock & Brown, with its financial expertise, can contribute to making these projects work,” said Melnyk, who is familiar with both companies. “If you have a partner that’s an investment banker and active in energy markets, that’s a nice combination.”

Offshore, land projects in works

Babcock & Brown already has tested similar waters elsewhere. The company in May called off plans to build a 500-megawatt offshore wind farm in the Gulf of Mexico off Padre Island, while moving ahead aggressively on land-based wind farms. The company also said that East Coast projects might be more promising for offshore wind because of higher regional energy prices and a scarcity of suitable onshore locations.

Timothy J. Considine, a professor at Pennsylvania State University’s Department of Energy and Geo-environmental Engineering, said that offshore wind projects were being driven in part by state efforts nationwide to mandate use of cleaner, renewable energy sources by utilities.

Some investors are likely to find the eastern United States and mid-Atlantic particularly attractive for renewable energy projects, Considine said, because prices for competing energy sources already are high in that region.

“There have been studies that have shown that these renewable energy standards will lead to substantial increases in electricity prices in the United States,” Considine said. “If people want green power, they’re going to have to open up their wallets and pay for it.”

By Jeff Montgomery

The News Journal

delawareonline.com

28 September 2007

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

Wind Watch relies entirely
on User Funding
Donate $5 PayPal Donate

Share:


News Watch Home

Get the Facts Follow Wind Watch on Twitter

Wind Watch on Facebook

Share

CONTACT DONATE PRIVACY ABOUT SEARCH
© National Wind Watch, Inc.
Use of copyrighted material adheres to Fair Use.
"Wind Watch" is a registered trademark.
Share

Wind Watch on Facebook

Follow Wind Watch on Twitter