California-based Clipper Windpower and BP Alternative Energy have allied in a long-term agreement to jointly development five of Clipper’s domestic wind energy projects in New York, Texas and South Dakota, which would have a total generating capacity of 2,015 MW. Under the agreement, BP secured a mix of firm and contingent orders of up to 2,250 MW of additional Clipper turbines for its global wind portfolio.

As part of the deal, BP acquired a five-year share option for a 10% equity interest at $6.92/share in Clipper Windpower, subject to shareholder approval. The London oil major also agreed to acquire a 50% interest in the U.S. project, with an option to acquire 9.6 million shares of Clipper, for $30 million. In addition, BP agreed to pay Clipper up to $30 million more when the U.S. projects are completed. BP also will make a $30 million down payment for the 300 MW Liberty turbines for delivery in 2007 and 2008.

“This strategic alliance provides both Clipper and BP an unparalleled opportunity to capture a major foothold in the U.S. wind energy market,” said Clipper CEO James Dehlsen. “It enables Clipper to secure a pipeline of turbine deliveries in the next five years. The consideration for the proposals will assist in the execution of these deliveries.” Dehlsen said “active negotiations for other turbine and portfolio sales currently taking place,” and it “is possible” more contracts could be announced…”and at that stage an update will be given on our business plan.”

The portfolio will be developed over a five-year period. Each project will deploy Clipper’s Liberty wind turbines, and they will be jointly owned. Clipper will serve as project operator for two projects; BP will serve as operator for three. As part of the agreement, BP Alternative Energy will purchase 100 MW of Liberty turbines in 2007 and 200 MW of turbines in 2008, which it will used on other projects in BP’s global wind business. These orders represent the initial firm deliveries under the long-term supply agreement for up to 900 Liberty turbines over the next five years.

BP Alternative Energy CEO Steve Westwell called the Clipper turbine “a breakthrough in reducing the total cost of renewable energy.” He said BP was “pleased to be the first large customer for this innovative technology. Our strategic relationship with Clipper represents an important step in expanding BP’s low-carbon power business.”

Clipper will hold an extraordinary general meeting of its shareholders on Aug. 7 to vote on the strategic alliance. Completion of the alliance will take place if the special resolution passes, which will enable Clipper to grant the equity option to BP. Clipper has obtained irrevocable undertakings to vote in favor of the necessary special resolution from directors and connected parties and certain other shareholders in respect of 48 million Clipper ordinary shares, which represent about 50% of the stock.

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