Friday, September 28, 2007

A financial windshift for Delaware energy?

Eager to become the first northeast state to supplant a chunk of its fossil-fuel-derived energy with wind power, Delaware's Public Service Commission has been all but flogging the state's largest electricity producer, Delmarva Power, into a long-term contract with upstart wind farm developer, Bluewater Wind.

Bluewater is proposing to erect 150 wind turbines far enough off the state's coast to be barely visible. The $1.6 billion project would provide 450-megawatts of power--an amount the company says is used by as many as 100,000 households in the state.

Negotiations between Bluewater and Delmarva have been progressing, but the utility continues to hedge. One concern raised by project critics has been Bluewater's experience (it hasn't built a major wind park in the U.S.) and its financial depth.

Both objections likely were dispensed with yesterday with the announcement that Bluewater is being acquired by international investment firm Babcock & Brown (ASX: BNB). ,

That's a shot in the arm for the Delaware project and also could have implications for languishing off-shore wind proposals in New Jersey and New York. Bluewater had expressed an interest in both. Now, with Babcock & Brown's financial backing, more serious attention will have to be paid to the young developer.

More to read:
Babcock & Brown's press release on the acquisition
About Bluewater Wind
About its Delaware project
The News Journal story on the acquisition

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