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NJ Company Places $8.8 Million Bet on Fledgling Onshore Wind Market

NJR Clean Ventures takes 20 percent ownership state in OwnEnergy.

NJR Clean Energy Ventures is investing in the onshore wind market, even though it's uncertain whether a valuable production tax credit for wind farms will be renewed by the end of the year by Congress.

The subsidiary of Wall Township-based New Jersey Resources announced yesterday an $8.8 million investment to acquire an approximately 20 percent ownership position in OwnEnergy Inc., a developer of midsized and community wind projects.

Brooklyn-based OwnEnergy has developed and sold three projects in Texas, Oklahoma, and Pennsylvania and has in the pipeline more than 1,300 megawatts of wind projects.

"We believe this ownership stake represents a sound investment for our company and look forward to developing new wind projects through this partnership to make clean energy and its benefits more accessible,” said Laurence Downes, chairman and CEO of New Jersey Resources, which also owns the gas utility New Jersey Natural Gas.

Jacob Susman, founder and CEO of OwnEnergy, also lauded the deal. "It connects the financial profile and understanding of the energy marketplace of one of the most reputable energy companies on the East Coast to our proprietary technology and network of local energy entrepreneurs,” he said.

An unregulated subsidiary of New Jersey Resources, New Jersey Clean Energy Ventures has until now primarily focused on developing commercial and residential solar projects, building more than 35 megawatts of solar power.

Uncertain Outcome

Its investment in OwnEnergy comes at a time the wind industry is worried that a 2.2-cent-per-kilowatt-hour Production Tax Credit (PTC) may not be renewed by Congress. The credit is due to expire at the end of the year.

Even if the tax credit is not renewed, Rick Gardner, a vice president of New Jersey Clean Energy Ventures, said the investment is sound because what drives onshore wind projects are renewable portfolio standards, which mandate that utilities purchase a set amount of electricity from renewable energy sources. Besides New Jersey, 28 states and Washington, D.C., have renewable portfolio standards, Gardner said.

Wind is the most competitive form of alternative energy to conventional sources such as coal. "That's what makes it so compelling,” Gardner said, noting onshore wind is the cheapest source of renewable energy.

Paul Patterson, an energy analyst at Glenrock Associates, said onshore wind projects are a lot less risky than offshore wind, which New Jersey is trying to develop. "Offshore wind is a much bigger hurdle,” said Patterson, who noted, however, there is a lot of uncertainty as to whether the tax credit will be renewed.

According to the American Wind Energy Association, the United States had more than 50,000 megawatts of wind capacity installed by the end of June 2012, enough to power 13 million homes, or the equivalent of 44 typical coal plants or 11 nuclear plants, with virtually no pollution or water use.

It also is one of the fastest-growing sources of electricity, accounting for 35 percent of new generating capacity since 2007. The wind manufacturing sector employs 30,000 people in building the turbines, towers, blades, and other components.

"Every time a wind farm gets built, American jobs are created,” said Cai Steger, policy advocate for the Natural Resources Defense Council, which issued reports yesterday promoting wind farms as a boon to economic development. "These reports show what the PTC has done for the wind industry -- and why it is essential that it is extended.”

New Jersey is not expected to see many onshore wind farms because the wind resource on land is not enough to compete with other states, Gardner said.

Still, environmentalists applauded the deal.

"We think this is a great move to help make wind more of a reality in New Jersey,” said Jeff Tittel, director of the New Jersey Sierra Club. "There is a real need to develop small to midscale wind in New Jersey and this acquisition will help make it happen.”

New Jersey is hoping to develop more than 1,000 megawatts of offshore wind capacity, but the effort has stalled because the state has yet to adopt regulations that would provide a financing mechanism to facilitate the wind farms.

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