Google Kicks up Wind Storm

Off-Shore Wind Project will Require $5 billion from Investors

Google is kicking up quite a wind storm. It is doing it along with some co-investors that would eventually ante up a total of $5 billion to build a 350 mile under-water transmission off the Atlantic coastline to harness the wind there.

Boosting the country's off-shore wind potential is the central issue here. To that end, this project, which would take place over at least 10 years, would have the potential of delivering 6,000 megawatts of wind energy to residents along the East coast while possibly displacing some of the region's fossil-fuel usage. That would increase the venture's attraction despite being more expensive than on-land generation.

"This new American super grid off the Mid-Atlantic coast will unlock an important untapped resource, creating the foundation for a new industry and jobs for thousands of American workers," says Bob Mitchell, chief executive of Trans-Elect that proposed the idea and which has recruited Google, Good Energies and Japanese trading firm Marubeni as investors. Construction could begin in 2013 and be completed by 2021.

One has to also ask why an internet search engine company would be interested in building a complex under-water transmission system. For starters, this is not Google's first foray into the energy sphere or even the wind power component of it. It's already invested nearly $39 million in two wind farms that will generate 170 megawatts of electricity in North Dakota that are owned by NextEra Energy.

Google is a ravenous consumer of electricity and it must find a way to become more efficient and cleaner. By placing its bets on green energy, it is attempting to understand how it works and to help create economies of scale so that it can be cost-effectively generated. It operates hundreds of thousands of servers that use tons of electricity, which are often derived from coal. As the global leader in internet technologies, the web-based giant says that it can do better.

The basic building blocks are already in place. It has gained the experience constructing and designing large-scale data centers. The same lessons apply when it comes to expanding the use of renewable energy, it says, noting that the primary technologies are now available. They just need investment so that they can size up.

"We're excited about the potential of this project to help the Mid-Atlantic states meet their renewable energy goals by providing a platform that can rapidly accelerate the deployment of clean offshore wind at lower total cost," says Rick Needham, director of green business operations at Google. "Transmission is one of the key constraints to the wider adoption of clean energy, so this project was a natural fit with our corporate goal of investing in attractive renewable energy projects that can have dramatic impact."

Why so Confident?

The announcement comes at the same time as one by the Obama administration to lift the ban on oil and gas drilling in the Gulf of Mexico. The two concepts are not contradictory and, in fact, complement one another; they are part of a comprehensive outline to increase domestic energy production from all off-shore sources.

Earlier in the year, the U.S. Department of Interior gave its approval so that developers could go forth with Cape Wind, which is a wind project to be built off the shores of Nantucket in Massachusetts. That had been a nine-year struggle, although one last set of approvals is still needed from local utility commissioners.

Altogether, the Mid-Atlantic region could provide up to 60,000 megawatts of off-shore wind power, according to the conservation group Oceana. It did a study in which it concluded that investments in off-shore wind power in the Atlantic waters could generate 30 percent more electricity than economically recoverable off-shore oil and gas in the same region. Wind energy, it says, could supply half of the electricity used by residents of the East Coast.

"Our research revealed that harnessing offshore wind power in Atlantic waters is a much more cost-effective way to generate energy than oil and gas drilling," says Jacqueline Savitz, Oceana senior campaign director and analysis co-author. "If we can get more energy for less money, create more jobs and protect our environment from spills, why not choose offshore wind over oil and gas?"

Why are Google and company so confident about the approval process while the Cape Wind project has languished for years? Cape Wind, designed to offset fossil fuel usage in the area, would be located in waters where the politically powerful surround. The proposed super-grid in the Mid-Atlantic, for now, enjoys broad public support from the politicos and its would-be patrons.

That's because the Atlantic has shallow waters relative to most other potential off-shore sites, meaning the wind mills could be located far enough away so as not to be an eye-sore. At the same time, the four on-land connection points are much less hassle than the number that would be required if a 350-mile transmission system was built on land.

Still, the cost of the project is said to be about 50 percent more than if the generation was land-based. The investors, though, are factoring in potential subsidies and tax benefits as well as tougher environmental regulations dealing with carbon emissions. Once built, meanwhile, the transmission system would get federally-regulated rates of return.

"Appropriate development of Outer Continental Shelf wind power will enhance regional and national energy security and create American jobs," says U.S. Secretary of the Interior Ken Salazar.

Commercializing off-shore wind energy is part of the nation's game plan. But like any fledgling idea, it can and will be nay-sayed. Strategic thinkers like Google, though, understand its possibilities will forge the newfound path.

EnergyBiz Insider is nominated for Best Online Column by Media Industry News.

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