UPDATE: NRG Energy Buys Offshore Wind Business In Northeast US
(Updates with information from press conference call, additional details,
recent share price)
By Mark Peters
Of DOW JONES NEWSWIRES
NEW YORK -(Dow Jones)- NRG Energy Inc. (NRG) acquired offshore wind power
developer Bluewater Wind on Monday, seeing strong potential in a generation
technology that's still trying to find footing in the U.S.
The Princeton, N.J., power producer bought the business from Australia's
Babcock & Brown Ltd. (BBNLF) and Arcadia Windpower for an undisclosed sum.
Babcock & Brown is in the midst of liquidating assets. NRG Energy said it funded
the purchase with cash on hand.
The U.S. to date doesn't have a major offshore wind farm in operation.
Development has faced opposition over cost and location, with a lengthy battle
over a wind farm off Cape Cod, Mass., among the best-known examples. But as
demand for renewable energy grows, states in the Northeast are looking closely
at offshore projects to meet the growing requirements they've set for
electricity generated from renewable sources such as wind and solar.
"There is no doubt that offshore wind is the highest potential renewable
resource proximate to the population centers along the eastern seaboard of the
United States," NRG Chief Executive David Crane said in a statement.
Bluewater is developing offshore projects off the coasts of Delaware and New
Jersey, among other places. The Delaware project is the furthest along.
Bluewater holds a 25-year power-purchase agreement with Pepco Holdings Inc.'s (
POM) Delmarva Power & Light Co., with the project scheduled to be operational as
early as late 2013, the company said.
U.S. power companies have shown some interest in offshore wind, which is used
in Europe. A unit of Public Service Enterprise Group Inc. (PEG) is developing a
commercial-size wind project off New Jersey, while Duke Energy Corp. (DUK)
recently announced a test project for up to three turbines off the coast of
North Carolina.
Bluewater's development team will remain in place under NRG, with founder and
President Peter Mandelstam remaining in his current position and becoming head
of NRG's offshore wind development efforts. The company based in Hoboken, N.J.,
has eight full-time employees.
During a conference call Monday, Mandelstam said Bluewater drew strong
interest from investors around the globe before signing the deal with NRG
Energy.
NRG Energy has been expanding into renewable and nuclear power amid likely
federal climate-change legislation. Besides the Bluewater acquisition, NRG
Energy has developed two wind farms in Texas and formed a partnership to develop
solar facilities in the Southwest and California. Yet the independent power
producer's primary business remains selling power at market prices generated at
traditional power plants, including coal-fired, natural gas-fired and nuclear
power.
NRG Energy sees advantages to being first in offshore wind development in the
U.S., said Drew Murphy, NRG Energy's Northeast regional president, who added the
company continues to look for acquisition opportunities in renewable energy
following Monday's deal.
NRG Energy recently traded 2.9% higher at $24.45.
-By Mark Peters, Dow Jones Newswires; 212-416-2457; mark.peters@dowjones.com;
(END) Dow Jones Newswires
11-09-091435ET
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