NRG Energy bought Bluewater Wind from Arcadia Windpower and the financially troubled Australian company Babcock & Brown in a cash deal brokered by Credit Suisse, said NRG Energy Northeast Regional President Drew Murphy.

David Crane, NRG Energy president, said public policy is leaning toward higher renewable-energy portfolio standards. “There is no doubt that offshore wind is the highest potential renewable resource proximate to the population centers along the Eastern Seaboard of the United States,” he said.

Crane said NRG Energy has gained an advantage in the renewable energy market by acquiring an experienced developer with projects under way.

Bluewater Wind is working on seven offshore wind projects in the Northeast, including the one slated for installation off Rehoboth Beach, stated an NRG press release. The wind developer is also developing a project in New Jersey.

“By joining forces with NRG, Bluewater Wind will enhance its development expertise, as well as access to capital for the development and construction of these projects,” said Bluewater Wind President Peter Mandelstam.

Mandelstam will stay on as president of Bluewater and will direct NRG Energy’s offshore wind development. He called NRG Energy an ideal fit for Bluewater, in part because of NRG Energy’s commitment to cut carbon emissions from its power generation.

Delmarva Power welcomed the announcement. “We believe this is good news. Anything that will, at the end of the day, result in our contract with Bluewater Wind coming to fruition is good news for our customers and the state of Delaware,” said Bridget Shelton, spokeswoman for Pepco Holdings, the parent company of Delmarva Power.

Gov. Jack Markell said the purchase of Bluewater Wind marks an important step toward realizing Delaware’s goal to develop the nation’s first offshore wind farm, and generating hundreds of jobs in the process. “The agreement brings together the financing, experience and energy expertise necessary to develop the billion-dollar project – illustrating that smart environmental policy will help drive economic growth in Delaware,” he said.

NRG Energy renewable holdings

The purchase of Bluewater Wind adds additional renewable energy generation capability to NRG Energy’s existing holdings.

NRG Energy has two working wind farms and a third, near San Angelo, Texas, that will be online by the end of the year, said spokeswoman Lori Neuman.

Neuman said the company is also developing solar power plants that can generate up to 465 megawatts of power at various sites in the Southwest. The first will be in New Mexico, and two others are being developed for southern California.

This year, NRG Energy announced it was investing $500 million in the Indian River power plant, to add new air-pollution control technology to slash emissions of nitrous and sulfur oxides and mercury.

Bluewater timeline

This summer, Delmarva Power gave Bluewater Wind an extension on a letter of credit, said Bluewater Wind Delaware Project Manager Robert Propes. “Essentially, we had to post two letters of credit as part of the power-purchase agreement with Delmarva Power. Babcock and Brown posted one a short time after the power-purchase agreement was signed in the summer of 2009, and the second letter of credit was due in early July,” he said.

Because Babcock and Brown was in talks with prospective new parent companies, it wanted to see how the sale would play out before committing another $3 million, and Delmarva Power agreed to extend the deadline, Propes said.

Propes said Bluewater Wind was prepared to post the additional $3 million as soon as it reached a financial close with NRG Energy.

He described the letters of credit as akin to good-faith money. “If things go awry, and you can’t go forward with the deal - in this case, if we can’t make good on the power-purchase agreement - Delmarva Power can collect some portion, or all, depending on how far we are down the road on that project,” he said.

Propes said Bluewater Wind may make changes to its project timeline, but will stay within the confines of its agreement with Delmarva Power.

Mandelstam said 2013 remains the goal for starting construction.

Shelton said flexibility was built into the contract between Delmarva Power and Bluewater Wind. “As far as a timeline goes, we’d certainly work with them on that,” she said.

Shelton said Delmarva Power also has three contracts for land-based wind power, separate from the Bluewater deal. She said a considerable amount of wind-generated power is about to be put on the area power grid.

Propes said the company is still on target to install a meteorological tower in the ocean in the spring of 2010. He said the company is waiting for the federal Minerals Management Service, which governs leases of the continental shelf, to request applications for offshore wind development. That would allow Bluewater Wind to file an application for the wind farm, he said.