Will NRG Buy Bluewater Wind?
Bluewater has been shopping for a new owner since Babcock & Brown found itself, shall we say, overextended. Babcock is being broken up and sold off piece by piece. Bluewater hired investment banker Credit Suisse to look for a new owner.
I've taken a quick look at NRG's finances. Profits are down from a year ago, but the balance sheet is holding up; net current assets were $3 billion at the end of the third quarter. Bluewater will need about a billion dollars or so over the next three years to build the wind farm, though this number could climb if the company signs up more buyers and builds more capacity. In return, Bluewater will throw off 25 years of guaranteed revenue thanks to the Power Purchase Agreement (PPA) with Delmarva Power.
The Indian River power plant near Millsboro has been the perennial number one on Delaware's air pollution hit parade, though NRG has agreed to close the two oldest and dirtiest units and invest $500 million in new emissions controls.
NRG competed with Bluewater Wind and Conectiv to build a new power plant in Delaware. To the surprise of nearly everyone, Bluewater won the competition and went on to negotiate a PPA with Delmarva Power.
NRG's energy portfolio includes coal, natural gas, nuclear, wind and solar power plants.
Opponents of action on climate change have been struggling to come to terms with the significance of big energy companies supporting cap and trade legislation and investing in renewable energy projects. Now the shoe is on the other foot, and it's the turn of environmental advocates to come to terms with big energy companies supporting cap and trade legislation and investing in renewable energy projects, while continuing to own and operate coal power plants. If renewable energy makes economic sense (as I and others argue), then we should expect—and welcome—big energy companies buying into wind and solar projects.