Download now: King Coal Triple Play

Second U.S. Offshore Wind Project Approved

NRG Energy (NYSE:NRG) May Sell Project

Written by Swagato Chakravorty
Posted October 25, 2012

Following the Cape Wind approval, the U.S. just approved its second offshore wind project lease.

The Interior Department approved NRG Energy Inc.’s (NYSE:NRG) proposed 450-MW facility on Tuesday. The lease covers more than 96,400 acres of ocean around 12.7 miles off the coast of Delaware, and the facility could be sufficient for over 100,000 households.

Back in December, NRG had shelved the Delaware project and sought buyers for the Bluewater unit as it could not secure enough investors. But the company did keep up pursuit of the lease approval.

Now that the lease has been approved, it’s likely that the whole proposal will seem a lot more attractive to potential investors, though NRG is still considering a sale.

A federal Production Tax Credit on wind energy is set to expire at the end of 2012, and the continued inaction on the matter is seriously hindering the development of wind power in the U.S. The credit pays 2.2 cents per kilowatt-hour for all electricity generated from renewable sources, including, of course, wind.

Amy Grace, a Bloomberg New Energy Finance analyst, said to BusinessWeek:

“There’s still a lot of uncertainty regarding the PTC and an offtake agreement for the project. The bottleneck now is really on the revenue side. How do you get paid for your expensive wind energy?”

In general, onshore turbines have a cost of 8.3 cents per kilowatt-hour of produced energy, while offshore projects can be as costly as 21.8 cents for each kilowatt-hour. The tax credit is necessary to keep them financially feasible.


Energy demand will increase 58% over the next 25 years.

Trillions will be spent to secure the world's energy supply over the next two decades... and all sources are on the table.

Oil, Natural Gas, Solar, Wind. There will be money made.

Follow the money trail. Sign up for Energy and Capital now--It's free.

We never spam! View our Privacy Policy

By signing up, you'll also get our latest report, Six Oil & Gas Steals.


Related Articles

Offshore Wind Investment Opportunities
Cherry-picking offshore wind investment opportunities in Europe.
Offshore Wind Struggles in Germany, the UK
Despite David Cameron's and Angela Merkel's efforts, offshore wind power has hit a rut.
Offshore Wind Could Power U.S. East Coast
A new study found that offshore wind power from just the Atlantic could power the entire U.S. East Coast...


Invest in the Lithium Revolution
Lithium Demand is Going Berserk
Investing in the Tesla (NASDAQ: TSLA) Powerwall
Tesla (NASDAQ: TSLA) Just Killed Your Power Company
Investing in Legal Marijuana
Time to Buy!
Tesla (NASDAQ: TSLA) Powerwall Investing
How to Make $800 Million in One Week!
Putin and Saudi Arabia: Oil Dream Team Meet
New Report: Nuclear's Worldwide Expansion