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Font Size: Decrease Increase Print Page: Print June 24, 2008
A BABCOCK & Brown subsidiary has signed a 25-year deal to sell power from an offshore US wind farm to an East Coast utility company.

The Delmarva Power utility has agreed to purchase power supplies from a proposed offshore wind farm that would be constructed 18.5 km in the Atlantic off the coast of the eastern state of Delaware.

“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 the head of Babcock & Brown's North American energy group, Hunter Armistead.

The companies did not disclose the deal's value.

Bluewater Wind Delaware, the Babcock & Brown subsidiary that will operate the wind farm, said the alternative energy project would deliver “clean and renewable energy” as well as create new jobs.

While more costly to build than land-based wind farms, offshore wind farms can take advantage of stronger, steadier coastal breezes. Several European countries have already embraced offshore wind farms as key energy sources.

Delmarva Power has agreed to buy up to 200 megawatts of power from Bluewater Wind Delaware, enough electricity to power up to 60,000 American households, under the contract.

Bluewater said it would determine the final size of the offshore wind farm within two years, as it seeks to gain the necessary state and federal approvals to get the project up and running.

Interest in alternative energy sources has boomed in recent years amid concerns about climate change and as world oil prices have skyrocketed.

The Babcock & Brown unit has also signed a memorandum of understanding with the Delaware Electric Municipal Corporation which could lead to a much larger power supply deal being secured.

Under Delaware's renewable energy goals, Delmarva Power must ensure that 20 per cent of its electricity supply comes from renewable sources by 2019.

Delmarva said it hoped to start providing power to its customers from the offshore wind farm by 2012. The utility is a unit of Pepco Holdings.