NRG Expands Its Renewable Energy Business
By Cassandra Sweet, Of DOW JONES NEWSWIRES
SAN FRANCISCO -(Dow Jones)- U.S. independent power producer NRG Energy Inc. (
NRG), known for its large fleet of fossil fuel and nuclear power plants, has
been snapping up renewable energy assets and plans to buy more, a company
executive said Wednesday.
As the owner and operator of roughly 24,000 megawatts of mostly coal, natural
gas and nuclear power plants, and a large nuclear power plant under development,
NRG is next looking to expand a renewable power business, with a focus on solar
power, said Tom Doyle, president of NRG's solar unit.
"We see the solar industry as a really attractive opportunity for NRG right
now," Doyle said in an interview.
Having purchased offshore wind-power developer Bluewater Wind and a 21-
megawatt California solar farm built by First Solar Inc. (FSLR) earlier this
month, NRG is keen to buy more renewable energy assets in the next few months,
and has its eye on about 300 megawatts of projects, Doyle said.
NRG is looking to buy renewable energy projects that can start commercial
operation by 2011, and the company has put together a revolving credit facility
to provide the financing, Doyle said. Although he declined to name any financial
institutions involved, Doyle said lenders' interest in renewable energy
financing is "fantastic."
"They're all looking for a way to get into this market," he said.
NRG is looking specifically for solar-panel projects that are in a late stage
of development and either need help with financing and completing the project,
or like First Solar, simply want to offload the project.
"We're looking at opportunities where we take an ownership position and put
equity in," Doyle said. He added that federal stimulus funding for renewables,
including a 30% investment tax credit and loan guarantees, make investing in
solar and other renewable projects particularly attractive.
Meanwhile, the company is developing three solar-thermal power plants in
California and New Mexico with developer eSolar, in which NRG owns a minority
stake. NRG also owns some wind farms in Texas and is experimenting with using
biomass materials like switchgrass and sorghum to replace some of the coal at
its Big Cajun 2 power plant in Louisiana.
Spurred by state renewable-energy requirements, solar and other renewable
energy markets are poised to take off when the U.S. establishes climate-change
legislation, which will put a price on carbon emissions and level the playing
field between fossil-fuel generation and renewable energy, Doyle said. NRG sees
an advantage in buying into the market now, before prices rise, he said.
"We're getting in early," said Doyle, who left California solar-thermal power
developer BrightSource Energy Inc. in October to manage NRG's solar business.
Some analysts have expressed skepticism about the profitability of renewable
energy compared to conventional baseload power from fossil-fuel plants. But
Doyle insisted the profits are there.
"Returns for solar projects are at least as attractive as what you'd get from
fossil-fuel projects," Doyle said, adding that he developed fossil-fuel plants
for 20 years before entering the solar industry.
Shares of NRG closed Wednesday at $24.15, up 1.2%.
-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@
dowjones.com
(END) Dow Jones Newswires
11-25-091739ET
Copyright (c) 2009 Dow Jones & Company, Inc.
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