T. Boone Pickens, the hedge fund manager with a plan to get the U.S. off of foreign oil, is stalling the financing of his massive wind farm due to the debt markets, Pickens tells us. Pickens says he was originally planning to finance his 4,000-MW wind farm in Texas with 30 percent equity and 70 percent debt financing, but more recently the debt markets have caused a “financial hangup.”
That could very well mean that the project misses its previously planned construction date of 2010. Pickens says the project will remain on hold until the debt markets get better, though he is still hopeful that the project can meet the previous construction timeline. But Pickens also said that the project was reliant on being able to raise the necessary debt; if he can’t raise the money, he can’t do the project by himself.
Pickens also says that now he is planning on using transmission lines from a group of Texas transmission providers called Competitive Renewable Energy Zone (CREZ) to connect his wind corridor to cities that will use the power. Pickens, who originally wanted to build his own transmission lines for the wind farm, said that the decision was partly based on the fact that building his own transmission was more expensive than he had anticipated.
Despite any potential delays and scale backs, Pickens says the wind farm will be built. He already placed an order of $2 billion for 667 wind turbines from GE. Pickens, who says getting the U.S. off foreign oil is his chief concern and that the climate change crisis “is on page 2,” is also spending $58 million on a PR campaign to tell Americans about his wind and natural gas vehicle plan. “The wind has got to go forward,” he said.
While Pickens has acknowledged the financing delay, a lot of things can happen between now and any construction delay — particularly, policy measures could be enacted that could help reinvigorate debt markets for renewable energy. Pickens says he supports extending the production tax credits, which provides incentives for wind, by 10 years. He also is trying to get the next administration to take a look at — or even take action on — his wind and natural gas vehicle plan within the first 100 days.
The markets might be hard, but Pickens still has his sense of humor. In a nod to the recent proposed auto bailout and government support of banks, he said maybe the easiest way to get the money for the wind farm would be to declare the project a bank or an auto company.