AES Corp., a Virginia-based utility, said Tuesday that it plans to buy a company that operates 1,371 wind turbines near Palm Springs and employs about 100 people at an operations center there.
Jan. 13AES Corp., a Virginia-based utility, said Tuesday that it plans to buy a company that operates 1,371 wind turbines near Palm Springs and employs about 100 people at an operations center there.
The $60 million purchase of San Diego-based SeaWest Holdings Inc. will make AES one of the nation's biggest wind farm operators and developers, with projects in 13 states. The deal should close by April.
"Wind is a fast growth opportunity in the United States right now," Ned Hall, managing director of global development for AES, said in a telephone interview. "An acquisition like this allows us to get into the market quickly."
Nineteen states, including California, require power companies to sell electricity generated from renewable sources, he added. "Of those, wind has the lowest cost."
Founded in 1982, SeaWest is one of the oldest and largest privately owned wind energy firms in California, but it has faced more competition recently from global energy conglomerates, said SeaWest executive vice president Ryan Pfaff.
These "large balance sheet companies" have "recognized that the wind sector is where the development opportunities are at the moment," he said in an e-mail.
The result has been industry consolidation by power conglomerates like Florida's FPL Energy, Portland, Ore.-based PPM Energy, and Shell Renewables. All three have bought major wind farms near Palm Springs in the past three years.
Since typical wind projects cost $120 million to $150 million, it became clear that SeaWest needed more money to be able to compete, Pfaff said.
AES chose SeaWest because of its vast portfolio and because of the number of projects in its development pipeline, Hall said. The publicly traded utility, which owns no other wind projects in the area, plans to keep all of SeaWest's assets and employees, he added.
By most standards, a megawatt can power about 1,000 homes per year.
The SeaWest acquisition shows how important wind has become for power companies, said Chris Coleman, operations manager for Palm Springs-based Wintec Energy, which owns and operates several wind farms in the area.
"It's mainstream energy now instead of an experiment," he added.
The San Gorgonio Pass, northwest of Palm Springs, is one of three major wind-energy-producing areas in California.
The others are the Altamont Pass southeast of San Francisco and the Tehachapi region near the Mojave Desert.
POWER PLAYER: SeaWest operates about 2,300 wind turbines in the United States, producing about 480 megawatts of power, including 230 megawatts in Riverside County.
Source: SeaWest Holdings Inc.
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