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Power Companies Target Texas, New York for Wind Projects

The flurry of new wind power project developments continued unabated last week, with AES Corp. entering into a joint venture (JV) to develop wind generation projects in New York state and FPL Energy LLC and ScottishPower unveiling new wind power projects that will be built in Texas and New York, respectively.

AES has entered into a joint venture (JV) with EHN, one of the world's largest renewable energy companies, to develop wind generation projects in New York state.

Through the JV, AES and EHN will focus their initial development efforts on advanced projects in Niagara County and Clinton County, where the companies have gathered over two years of meteorological data and have large real estate holdings. They also will pursue other new project and acquisition opportunities throughout the state.

The companies expect to build more than 350 MW of new capacity in New York over the next few years. AES did not disclose the terms of its investment in the venture.

AES expects to see strong opportunities for wind energy in New York state as a result of Gov. George Pataki's announced goal of obtaining 25% of the state's energy requirements from renewable resources by 2013, including wind, solar and other renewables.

New York is one of 18 states in the U.S. that have passed, or have pending, legislation on renewable portfolio standards. Global demand for wind generation is expected to grow by more than 15% a year, from 46,000 MW in 2004 to 112,000 MW by 2010.

ACCIONA Energia, the energy division of Spain-based ACCIONA, is headed by EHN. It is a world leader in renewable energy, with more than 2,600 MW installed itself or for other companies, of which more than 1,600 MW are attributable to the group. It has wind energy assets -- operational and under construction -- in Spain, France, Germany, Canada, the U.S., Ireland and Australia, as well as mini hydro, biomass and solar energy facilities.

This is AES's third expansion into wind generation in the past six months. AES recently completed its acquisition of SeaWest, which has wind facilities and development sites in the western U.S. In 2004, AES invested in US Wind Force LLC, which is developing wind generation projects in the largely untapped renewable energy market in the Mid-Atlantic U.S.

AES will begin construction in May on SeaWest's 120 MW Buffalo Gap wind generation project near Abilene, TX and plans to have it on line by the end of 2005. Through the SeaWest acquisition, US Wind Force investment and the joint venture with EHN, AES has approximately 2,750 MW of projects in development.

In related news, AES has appointed company executive Ned Hall to the newly established position of vice president for wind generation. AES President Paul Hanrahan said the creation of the position of vice president, wind generation, underscores AES's commitment to renewable energy. While Hall's primary focus will be on the high-growth wind energy sector, "Ned will also be responsible for the company's other renewable energy initiatives," said Hanrahan.

Hall has been with AES since 1988. His previous positions with the company include managing director-business development, where he originated and managed AES's business development opportunities, primarily in wind and LNG. Before that, he was group manager responsible for development and operations in the U.S. and international locations. He also served as executive vice president of AES China Generating Co. Prior to joining AES, Hall worked for the New England Electric Co.

Meanwhile, FPL Energy, a subsidiary of FPL Group Inc., will build, own and operate a new wind farm in Texas, the Horse Hollow Wind Energy Center, to be located in Taylor County, Texas.

The 220.5 MW Horse Hollow Wind Energy Center will be comprised of 147 1.5 MW wind turbines spread over a 22,500 acre site approximately 15 miles southwest of Abilene. Initial site work on the project is underway with full-scale construction expected to begin in the next few weeks and be completed no later than December 2005.

The Horse Hollow project is FPL Energy's second wind project in Taylor County. The company recently began commercial operation at the 114 MW Callahan Divide Wind Energy Center located approximately 12 miles southwest of Abilene. The company's previously announced 106.5 MW Weatherford Wind Energy Center in Oklahoma is under construction and expected to begin commercial operation during the second quarter 2005.

Together these projects represent 441 MW of the company's goal of adding up to 750 MW of new wind to its portfolio in 2005. When the Weatherford and Horse Hollow projects are complete, FPL Energy will own and operate nearly 3,200 net MW of wind generation.

ScottishPower said its U.S. competitive subsidiary, PPM Energy, and its joint venture partner, Zilkha Renewable Energy of Houston, will build and own the Maple Ridge Windfarm in upstate New York.

Maple Ridge is expected to be 198 MW, nearly quadrupling the total installed wind capacity in New York. The Goldman Sachs Group recently announced plans to acquire Zilkha Renewable Energy, subject to regulatory approvals.

PPM's share of the capital invested in the project is expected to be approximately $160 million, with completion of the 120-turbine windfarm expected in December 2005. It is expected that the project will be immediately earnings enhancing with returns anticipated to be consistent with internal targets.

Maple Ridge is strategically located so that it can sell power into the New York power pool and has sold renewable energy certificates (RECs) under a 10-year contract to the state of New York.

PPM controls about 830 MW of operating wind energy, and previously announced three other projects totaling 325 MW earlier in the year.

Along with the Maple Ridge Windfarm, these projects will bring PPM's total wind portfolio to approximately 1,255 MW by the end of 2005, well on target toward its goal of at least 2,300 MW online by 2010.

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