ARLINGTON, Va., Aug 28, 2006 -- BUSINESS WIRE

 

The AES Corporation (NYSE:AES) today announced it has begun construction of a 233 MW wind generation project near Abilene, Texas, and has signed a 10-year power purchase agreement (PPA) to sell all of the electricity the project produces at fixed prices to Texas retail electric provider Direct Energy.

The project, Buffalo Gap 2, is an expansion of the company's 121 MW Buffalo Gap wind farm which began operations near Abilene earlier this year. Once completed, the two projects will comprise one of the largest operating wind farms in the United States and will have the capacity to generate enough energy to power approximately 100,000 homes in Texas.

"The Buffalo Gap expansion is consistent with AES's strategy to grow our wind generation business in highly attractive markets like Texas. We plan to continue to expand in Texas and have a number of additional projects currently underway," said Ned Hall, AES Vice President, Wind Generation. "Signing a second PPA with Direct Energy, the counter party for the first phase of AES's Buffalo Gap project, furthers our partnership with one of the largest purchasers of green electricity in Texas."

Texas accounts for almost one-fourth of the total wind generated megawatts installed in the United States and has one of the nation's most attractive markets for additional wind generation development, according to the American Wind Energy Association (AWEA).

"Wind is a key component of AES's strategy to aggressively grow our alternative energy business. We recently announced plans to triple our investment in the sector over the next three years and we will continue targeting opportunities in high growth markets like Texas," said William Luraschi, AES Executive Vice President of Business Development. "As one of the cleanest, lowest-cost renewables--and with global installed wind generation capacity expected to double over the next five years--wind will be an area of continuing focus and priority for AES."

AES purchased 155 GE 1.5 MW wind turbine generators for the project. D.H. Blattner & Sons, Inc. is the engineering, procurement and construction contractor for the project. Commercial operation is expected in mid-2007.

AES has been in the wind generation business since 2004 and currently operates 600 MW of wind facilities. It recently expanded its wind generation business to Europe, with the acquisition of a majority stake in Wind Energy Ltd. (WEL) group companies, a UK-based wind development company. WEL currently has 640 MW of wind generation projects under development throughout Scotland. Earlier this year, AES announced plans to triple its investment in wind generation over the next three years, and currently has an additional 2,000 MW of wind projects in development in the United States. AES also is currently evaluating wind power projects in continental Europe, China, India and Central and South America, with an emphasis on countries with existing AES businesses.

Direct Energy is part of the Centrica group of companies, one of the largest multi-state providers of deregulated retail energy services in North America and the third largest retail energy provider in the state of Texas. Direct Energy serves customers in nine U.S. states and in Canada. Globally, the Centrica group of companies is a leading provider of energy and other essential services with more than 31 million customer relationships.

About AES

AES is one of the world's largest global power companies, with 2005 revenues of $11 billion. With operations in 26 countries on five continents, AES's generation and distribution facilities have the capacity to serve 100 million people worldwide. Our 14 regulated utilities amassed 2005 annual sales of over 82,000 GWh and our 122 generation facilities have the capacity to generate approximately 44,000 megawatts. Our global workforce of 30,000 people is committed to operational excellence and meeting the world's growing power needs. To learn more about AES, please visit www.aes.com or contact AES media relations at media@aes.com.

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES's current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, continued normal levels of operating performance and electricity demand at our distribution companies and operational performance at our contract generation businesses consistent with historical levels, as well as achievements of planned productivity improvements and incremental growth investments at normalized investment levels and rates of return consistent with prior experience. Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES's filings with the Securities and Exchange Commission, including, but not limited to, the risks discussed under Item 1A "Risk Factors" in AES's 2005 Annual Report on Form 10-K. Investors and other interested parties are encouraged to read AES's filings to learn more about the risk factors associated with AES's business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE: AES Corporation

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