ENERGY GIANT BUYS OFFSHORE WIND

NRG Energy sees offshore wind revenue by 2014
Steve Gelsi, November 10, 2009 (MarketWatch)

"NRG Energy paid about $10 million [to Australia's Babcock & Brown] for Bluewater Wind, an energy company that holds the only power purchase agreement for an offshore wind farm in the U.S….[T]he project carries apparent front-runner status for the U.S.'s first offshore wind farm -- a pet topic of the Obama Administration as well as a lucrative target for the financial community to tap into federal tax credits and loan guarantees…

"…Bluewater's 450 megawatt offshore wind project planned off the coast of Delaware could start producing billable electricity by late 2013 or early 2014…NRG officials said they hope to become first movers in the U.S. field of offshore wind energy, drawing from a wealth of expertise in Europe, home of more than 30 offshore wind projects…"

The resource is tremendous and it is right where the demand is. (click to enlarge)

"NRG was drawn to the offshore wind project as it moves to reduce its carbon footprint…[T]he proximity of offshore wind resources to big population centers in the Northeast makes [offshore wind there an especially attractive investment though]… any payoff is still years away…NRG will take on Bluewater's employees, buys development pipeline, and 25-year power purchase agreement with a unit of Pepco Holdings Inc. for the offshore Delaware project…

"Bluewater Wind Founder Peter Mandelstam said investment banker Credit Suisse drew interest in the firm from 87 interested parties, including groups in the Middle East, groups in Central Asia, groups in the Far East, in Europe and the U.S…[T]he company has won an approval to build two towers in the Atlantic Ocean - one in Delaware and one in New Jersey - to assess wind strength. Construction on the two towers is expected next year."

Experience buidling offshore wind in Europe will inform U.S. Atlantic coast projects. (click to enlarge)

"…[T]he Power Purchase Agreement for the offshore wind project will allow the company to raise financing to build the wind towers, while the final permitting process continues… NRG plans to apply for federal support in the form of Department of Energy loan guarantees -- money included in the Obama administration's economic stimulus plan…[and push] for the continuation of production tax credits…

"The production tax credit will be [vital to making early offshore projects economic]… [though there should be]… healthy interest from banks to finance the offshore projects after extensive experience in Europe…[A] recent $500 million issued by the U.S. Department of Treasury for wind energy projects [will be important]…[but it will also be important for Congress to act because the] current round of production tax credits for wind expires in 2012…"