AES Expands Wind Power Business into China

The joint venture will construct, own and operate a 49.5 megawatt (MW) wind farm, which is currently under design and expected to achieve commercial operation in 2009. Through its investment in the joint venture, AES will become the first U.S.-based power company with wind generation facilities in China.

Located approximately 200 kilometers southeast of Beijing, the project has the potential to generate up to 225 MW. The Hebei Provincial Power Company will purchase all of the power generated by the facility, as required by the Chinese Renewable Energy Law.

AES subsidiary AES Black Sea Holdings BV will own a 49% interest in the joint venture, known as Guohua AES (Huanghua) Wind Power Co. Ltd. The remainder of the joint venture will be owned by Guohua. Financial terms of the transaction were not disclosed.

"Through our joint venture with Guohua, AES is able to enter the promising wind market in China with a well-established and respected partner, and to create a platform for further wind activities in the future," said Ned Hall, President, AES Renewable Generation.

In other company news, AES announced the start of commercial operation of its 233 MW Buffalo Gap 2 wind farm expansion near Abilene, Texas. This expansion makes the Buffalo Gap wind farm the third largest in the state with a total wind power capacity of 354 MW.

Under a 10-year power purchase agreement, AES will sell all of the electricity Buffalo Gap 2 produces to Texas retail electric provider Direct Energy at a fixed price. Financial terms of the project were not disclosed.

The United States is on track to install over 3,000 MW of wind power capacity in 2007. Texas is likely to account for about two-thirds of the new installations, due largely to its renewables portfolio standard and other incentives for renewable generation, according to the American Wind Energy Association (AWEA).