Congress has thus far failed to renew the soon-to-expire tax incentives for renewable energy, and we’re seeing one of the first fatalities.
US energy giant NRG Energy says it’s putting all its offshore wind development "on hold" and closing the offices of subsidiary Bluewater Wind, while it looks for a buyer.
Bluewater Wind recently signed a 200 megawatt (MW) power purchase agreement for its first offshore wind project – the 450 MW Mid-Atlantic Wind Park off the coast of Delaware – which will now be cancelled. The project would have created 1,200 wind jobs.
NRG says the project isn’t financeable and is financially untenable at present because of dwindling federal incentives and because Bluewater hasn’t been able to find an investment partner for the Delaware project.
There are no more loan guarantees now that Department of Energy’s program has ended and Congress has yet to extend the Federal Investment and Production Tax Credits (PTC), which expire at the end of 2012.
The PTC provides 2.2-cent per kilowatt-hour for the first decade of a wind farm’s life.
Bluewater still plans to get a commercial lease for the Delaware site from the Interior Department in early 2012, which would be transferred to the new owner.
The Delaware project was the first under the Dept of Interior and BOEMRE’s "Smart from the Start" initiative, which seeks to jumpstart offshore wind in the US.
NRG acquired Bluewater Wind in late 2009, at the height of US investments in renewable energy under the Recovery Act.
In March, legislation was introduced in the Senate to extend production and investment tax credits for offshore wind power until 2020, but it’s gone nowhere.
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