NAW Exclusive: Inside Peter Mandelstam’s New Offshore Wind Venture

Mark Del Franco
Written by Mark Del Franco
on February 21, 2012 No Comments
Categories : New & Noteworthy

9416_peter_mandelstam NAW Exclusive: Inside Peter Mandelstam's New Offshore Wind Venture Peter Mandelstam, former president and founder of NRG Bluewater Wind, has started up Arcadia Offshore LLC, an offshore wind development company that promises to be active in bidding offshore wind projects from Maine to the Carolinas.

‘I'm proud to be continuing my work on the last decade promoting offshore wind and working to build one of the first offshore wind projects in the U.S.,’ Mandelstam tells NAW.

Mandelstam is no stranger to start-ups: Arcadia Offshore is the fourth company he has built. Before he founded Bluewater Wind, which was later acquired by NRG Energy, he started up Arcadia Wind, which built the 135 MW Judith Gap wind farm, Montana's first wind project.

Mandelstam was the founder of Bluewater Wind, and he served as the company's owner and president from 2001 to 2011. His achievements at the helm of the company include securing the first offshore wind power purchase agreement in the U.S. and the first determination of no competitive interest for ocean use off the coast of Delaware.

However, Mandelstam was unsuccessful in securing investors for NRG Bluewater's 200 MW Mid-Atlantic Wind Park, which had been planned off Delaware's coast. Due to several market factors, including an inability to secure financing, NRG Bluewater has suspended all active offshore development activity.

NRG Bluewater says it will continue to maintain its offshore wind assets and will continue to pursue a lease for the Delaware Mid-Atlantic Wind Park project, which it expects to attain by mid-year.

Mandelstam's contract with NRG Bluewater expired on Jan. 3. He says the experienced he gained in Delaware with respect to outreach and education efforts to the public, elected and appointed officials and the media will help guide his new venture.

‘My new company is raising capital currently in Europe and will complete for projects from Maine to the Carolinas,’ he says, adding that its near-term focus is on New Jersey, Maryland and New York.

New Jersey has pushed aggressively for offshore wind development of offshore wind, and the state's Board of Public Utilities (BPU) is in the midst of determining how the offshore wind renewable energy certificates (ORECs) – which were introduced late last year as part of Gov. Chris Christie's energy master plan – will work.

New Jersey's law for offshore wind provides ORECs to offshore wind developers if the BPU concludes a comprehensive cost-benefit analysis that job creation and economic development opportunities of developing offshore wind power outweigh the cost to ratepayers.

The law would ensure revenue certainty for up to 1,100 MW of offshore wind, provided the net-benefits test yields a positive result.

New Jersey is familiar ground for Arcadia Offshore. Leslie Garrison, who served as NRG Bluewater's state director for New Jersey, also made the move to Mandelstam's new venture.

Other Arcadia employees include Kevin Pearce, senior vice president, engineering and development; KC Sahl, New York project director; and Stephen Geiger, director of marine engineering.

Mandelstam has retained London-based investment bank Augusta & Co to raise development capital. According to its website, Augusta & Co. provides ‘equity and debt placement to companies, developers and investors across the spectrum of the European renewables sector.’

‘Currently, there are more dollars than deals in Europe,’ Mandelstam notes. ‘The European debt crisis has been worked through, and investors in Europe are excited about the opportunity. They all understand the next big market is the U.S.’

However, before the U.S. can realize its offshore wind potential, federal policy must be favorable – and few people understand the long-term ramifications better than Mandelstam, an American Wind Energy Association board member and chairman of its offshore group since 2006.

‘I join the rest of my colleagues on land and offshore in regretting that Congress has not yet extended the production tax credit or investment tax credit for wind,’ he says. ‘This delay into 2012 – perhaps even until after the November election – will cause many wind companies to suffer layoffs and project delays.’

With $60 billion in private capital invested and 85,000 people directly employed in the wind business, the wind industry has fulfilled its promise of job creation over the last six years, Mandelstam points out.

‘With 47,000 MW spinning today, this is a major national industry and job creator that deserves an extension of a very modest tax incentive that is only receivable after all the private work and private investment has occurred,’ he says.

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