NRG Energy, blaming a lack of federal subsidies and regulatory uncertainty, has stopped development work supporting its offshore wind projects, including a 200-megawatt initiative in Delaware.
The suspension, NRG said, would impact the Mid-Atlantic Wind Park, a 200-megawatt projects slated for construction off the coast of Delaware.
NRG, which acquired the Mid-Atlantic project as part of its 2009 buyout of New Jersey developer Bluewater Wind, said it’s been forced to scale down its offshore ambitions because it was unable to find a partner to help finance Mid-Atlantic and other projects. The company also blamed the overall regulatory uncertainty and a lack of subsidies. All of these factors made the project unfinanceable and financially untenable, the company said.
NRG said it had terminated the long-term PPA it had signed with Delmarva Power & Light Co., back in 2008.
Despite a deep offshore potential, the U.S. has so far been unable to build a single project. Cape Wind, the country’s pioneering developer of a 486-megawatt project in Massachusetts, has been trying to get an offtaker for half of its unsold output for years and can’t launch construction until it has secured this second PPA. In 2010 National Grid said it would buy half of Cape Wind’s output.
When NRG acquired Bluewater, in 2009, the outlook for offshore wind was much more positive. The Obama administration had clearly stated that it wanted to populate the U.S. coasts with large wind farms. This political goodwill helped Bluewater receive preferential development rights for a project it was developing off the coast of New Jersey. The project was inline to get a Department of Energy Loan Guarantee.
A little more than two years later, with DOE loan guarantees no longer available and investment and production tax credits not extended, the outlook for U.S. offshore is bleak.
Its seems Bluewater founder, Peter Mandelstam, which two years ago engineered the sale to NRG, hasn’t given up on the Delaware project or on any of his other projects. Trade publication North American Windpower reports that he has been out in Europe, scouting for investors to take over Bluewater’s project pipeline.