Bluewater, Delmarva in offshore wind farm contract

Hoboken, N.J.-based Bluewater Wind has signed a long term power purchase agreement to sell electricity from its planned Delaware offshore wind farm to utility Delmarva Power.

Delmarva, a unit of Washington, D.C.'s Pepco Holdings (NYSE: POM), said it would buy up to 200 megawatts of power from the wind farm.

Financial terms of the 25 year contract were not disclosed, but Delmarva said the purchase includes energy, capacity and renewable energy credits.

"With the addition of this contract, I'm confident we will meet the aggressive renewable energy goals established by Delaware in 2007," said Gary Stockbridge, president of the Delmarva Power Region.

Under the state's renewable energy goals, Delmarva said it must ensure that 20 percent of its electricity supply comes from renewable sources by the year 2019.

Bluewater Wind, part of Sydney, Australia's Babcock & Brown, said the offshore wind project is expected to have a total of 450 MW of nameplate capacity.

"Babcock & Brown believes this contract is a significant step toward developing Delaware's first offshore wind farm, which will almost certainly be the first offshore wind farm in the country," said Hunter Armistead, head of Babcock & Brown's North American energy group.

Bluewater said the project, which is reportedly estimated to cost $1.6 billion, would generate enough electricity for 110,000 Delaware households.

Delmarva said the wind farm could start delivering electricity in 2012. The utility said it has also agreed, subject to state approval, to implement an optional program that would give its customers the choice to purchase additional offshore wind power.