Australian
Wednesday 25/6/2008 Page: 33
A SUBSIDIARY of the Babcock and Brown investment group has signed a 25-year deal to sell power generated by an offshore US wind farm to an east coast utility company. The Delmarva Power utility has agreed to purchase power from a proposed offshore wind farm to be constructed 18.5km into the Atlantic off the coast of the eastern state of Delaware.
"This contract is a significant step towards developing Delaware's first offshore wind farm, which will almost certainly be the first offshore wind farm in the country," said Hunter Armistead, the head of B&B's North American energy group. The companies did not disclose the deal's value. Bluewater Wind Delaware, the Babcock and Brown subsidiary that will operate the wind farm, says the alternative energy project will deliver "clean and renewable energy" as well as create jobs.
While more costly to build than land-based wind farms, offshore wind farms can take advantage of stronger, steadier coastal breezes. Several European countries have already embraced offshore wind farms as key energy sources. Delmarva has agreed to buy up to 200 megawatts of power from Bluewater Wind Delaware enough electricity to power up to 60,000 American households under the contract.
Bluewater says it will determine the final size of the offshore wind farm within two years, as it seeks to gain the necessary state and federal approvals to get the project up and running. Interest in alternative energy sources has boomed in recent years amid concerns about climate change and as world oil prices have skyrocketed.
The Babcock and Brown unit has also signed a memorandum of understanding with the Delaware Electric Municipal Corporation which could lead to a much larger power supply deal being secured. Under Delaware's renewable energy goals, Delmarva Power must ensure that 20 per cent of its electricity supply comes from renewable sources by 2019. Delmarva says it hopes to start providing power to its customers from the offshore wind farm by 2012. The utility is a unit of Pepco Holdings Inc.
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