Blackstone Group LP (BX.N: Quote, Profile, Research, Stock Buzz) will invest in a 1 billion euro ($1.6 billion) project to build and manage a German offshore wind farm capable of powering half a million homes, the U.S.-based private equity firm said.
The wind farm will be the latest in a growing number aiming to cash in on European renewable energy subsidies, but will have to overcome supply and labour bottlenecks plus lingering uncertainty over the reliability of offshore turbine technology, analysts said.
"Projects of this scale were made possible thanks to the reformed regulations and incentives system in Germany that were passed in the German parliament in early June," Blackstone said in the statement on Tuesday.
"(It) will cost in excess of 1 billion euros to build."
Confirming a July 9 report by Reuters, Blackstone said it had formed a joint venture "Meerwind" with Germany's Windland Energieerzeugungs GmbH for the 400 megawatt project over an area of 40 square kilometres about 80 kilometres north of Germany.
The European Union earlier this year detailed plans to supply a fifth of all Europe's energy demand from renewable sources by 2020, up from less than 9 percent in 2005.
Germany and Britain are expected to open the floodgates to offshore farms to capture ample wind in the North Sea and northeast Atlantic. Britain last month hinted at more attractive subsidies and Germany increased its support.
