Wind power gains steam
GE takes stake in Houston company; regulators approve plan off Cape Cod
By TOM FOWLER
Copyright 2008 Houston Chronicle
Monday was a good day for the wind power business, with GE announcing a $300 million investment in Houston-based Horizon Wind and a disputed project off Cape Cod, Mass., clearing another regulatory hurdle.
GE Energy Financial Services, along with a Wachovia Corp. subsidiary, will take a stake in a 600-megawatt port- folio of projects being developed by Horizon in Oregon, Minnesota, Illinois and Texas.
All the projects except the one in Texas are operating or expected to start up this month. The Texas project, in Shackelford County, with an expected capacity of 200 megawatts, should be running by midyear, the companies said.
Also Monday, the U.S. Minerals Management Service said a proposed wind farm off Cape Cod would pose no major environmental problems, the Associated Press reported, giving a boost to the project that has sparked a long and bitter public fight.
The draft environmental report by the agency said plans by developer Cape Wind Associates to build 130 windmills across 25 miles of federal waters in Nantucket Sound would have mostly "minor" or "negligible" effects on wildlife, ocean navigation, fishing and tourism.
More GE investment
The Horizon investment is part of GE's effort to increase its renewable energy investing goal for 2010 from $4 billion to $6 billion, said Alex Urquhart, president and CEO of GE Energy Financial Services.
Renewable energy has become the fastest-growing part of GE Energy Financial Services' business, he said, thanks to the company's expertise and customer relationships, "high fossil fuel prices and popular support for cleaner power."
With the Horizon trans- action, GE has invested or is committed to invest $3 billion in 85 wind farms with more than 3,600 megawatts of capacity.
Horizon is a subsidiary of the Portuguese utility Energias de Portugal, which bought the company from Goldman Sachs last year for $2.2 billion.
With Monday's deal, Horizon will have financed over 1,300 megawatts of wind farm capacity in the equity market for the past year.
"The strong market for these types of investments allows Horizon to continue its ambitious growth program," said Horizon Chief Financial Officer Jayshree Desai.
Tripling capacity by 2015
While wind still accounts for a tiny percentage of U.S. and global power production, capacity is set to more than triple from about 91 gigawatts now to more than 290 gigawatts by 2015, according to a recent forecast from Emerging Energy Research.
Texas is the largest producer of wind power in the U.S., having surpassed California in 2006.
In Texas, wind power represents the largest share of new electric generation projects, with 39,555 megawatts proposed, according to a recent report by the Electric Reliability Council of Texas. It is followed by natural gas at 25,525 megawatts; nuclear at 12,386 megawatts; and coal at 7,549 megawatts.
Growth in the business had been hampered by a shortage of available wind turbines, but that's beginning to change. Nearly every major wind turbine supplier is increasing production capacity, with new plants planned in North America, Europe, Asia and South America.
Wind power's downside
But the business isn't without its problems.
Since wind isn't always reliable, wind power projects are included in a region's available resources on a discounted basis versus natural gas, coal or nuclear powered plants. ERCOT changed its methodology for counting wind generation recently, however, counting 8.7 percent of a turbine's total capacity in reliability calculations, up from just 2.6 percent.
Renewal of a key underpinning of the wind power business, a tax credit that is set to expire at year's end, wasn't included in federal energy legislation passed in December.
And even in wind-friendly Texas, projects are meeting resistance. Environmental groups are opposing a 1,200 megawatt project under construction in Kenedy County because of the dangers it might pose to migrating birds.
A study released this month predicted the "projects could result in the largest and most significant avian mortality event in thehttp://www.chron.com/disp/story.mpl/headline/biz/5454511.html history of wind energy." |
