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Wind investment sees fastest growth -- GE Financial

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The investment arm of global industrial giant GE has pushed its renewable energy portfolio beyond $3 billion with the purchase a $300 million equity stake in 600 MW of wind power projects owned by Horizon Wind Energy, a Houston company owned by Portuguese national energy company Energias de Portugal since mid-2007. Furthermore, GE Energy Financial Services (GEEFS) says it will invest $6 billion in renewables by 2010, equivalent to around one quarter of its energy and water portfolio. The company's previous target for renewables investment was $4 billion by 2010, set less than a year ago.

GEEFS CEO Alex Urquhart says the combination of GE expertise, high fossil fuel prices and popular support for cleaner power, has made renewable energy its fastest growing business. "With our broad capabilities to invest equity and debt within and outside the United States -- not only in wind but in solar, biomass, hydro and geothermal power -- we have become a major player in a $60 billion annual renewable energy market," he says.

Wind energy is GEEFS's most active area in renewables and the Horizon deal its largest to date. The portfolio consists of four projects in Oregon, Minnesota, Illinois and Texas. Construction of three of the four was to be completed last month, with the fourth coming online by mid-year. The output of all the projects is contracted to third-party purchasers. Additional financial details were not disclosed.

The deal gives GEEFS an equity stake in 85 wind farms worldwide with a combined capacity of more than 3600 MW. It also caps off a busy week of investment in US wind farms that started with an announcement the company was taking an undisclosed equity position in a 166 MW Texas wind project that will supply Austin with renewable energy under a 15-year power purchase agreement.

Texas and Turkey

The project's developer, the American arm of the UK's Renewable Energy Systems (RES), began construction of the Hackberry plant near Abilene last month and expects to have the 72 Siemens 2.3 MW turbines up and running by December. It is GEEFS's first investment with RES.

The company is also making its first wind investments with Italy's Enel, taking a share in the utility's recently completed 63 MW Snyder wind project in Texas. Located in Scurry County, between Abilene and Lubbock, the wind farm is made up of 21 Vestas 3 MW turbines on extremely tall towers measuring 105 metres. Power will be sold into the spot market. The project has a 1.1 million MWh, ten year, fixed price hedge agreement with Fortis Energy Marketing & Trading to provide revenue stability and accommodate wind energy's seasonal output.

GE is also investing in Enel's 101 MW Smoky Hills project in Kansas, expected online early this year. Power from the project, which employs 56 Vestas 1.8 MW turbines, will be sold through purchase agreements with Sunflower Electric Power Corporation, Kansas City Board of Public Utilities and Midwest Energy Inc. Financial details of the Enel transactions were not disclosed either.

Further afield, GEEFS has also bought a 50% stake in the Turkish energy producer Gama Enerji, which has a development portfolio of nine wind power projects totalling 490 MW. The two companies plan to invest in energy and water projects in Turkey and the surrounding region. Again, no financial details were revealed.

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