Google Buys Significant Stake In Atlantic Wind Power Project

Early last week, Google announced that it, along with new partner Good Energies, have each agreed to take a 37.5% stake in the $5 billion Atlantic Wind Connection (AWC) project. The transmission grid, which will be built off the US coast in the Atlantic Ocean, was first proposed by US based transmission line company Trans-Elect, who will also be in charge of construction. Initially, Google and Good Energies have committed US$200 million in capital investment to support development. Japanese trading house Marubeni has also taken a stake of 15% in the project. While Google has always been committed to unusual innovation, many were surprised to hear about this investment. Interestingly enough, Google's investment in this energy project is not its first within the energy sector. In fact, just recently, Google announced plans to invest in a number of UK wind projects, while also pursuing a partnership partnership with GE that will support the development of new technology for the United States electricity grid transmission infrastructure. According to Google leadership, construction on the Atlantic Wind Connection (AWC) farm is expected to start in 2013, and the first 150 mile phase (with an estimated cost of US$1.8 billion) is expected to be complete by 2016. The entire project will be online by 2021.

While many are excited about Google's initial investment, many more are excited about what this investment means for the future of renewable energy in the United States. The transmission lines would run as far as 20 miles offshore from Virginia to New Jersey. The initial phase of the project would be capable of delivering 2,000 megawatts of wind energy — enough to power about 500,000 homes. The transmission lines will also enable connected wind farms to send energy through the power grid to a number of major census metropolitan areas, including New York. While the project continues to generate significant interest, regulatory approval for the project is expected to be the biggest hurdle. Specifically, while the US federal government has been mostly receptive to the idea, the fact that this transmission project is the first of its kind could create legislative resistance. On the other hand, many proponents of the farm are optimistic, noting that because the project only needs to get approval from the federal government, the probability of timely approval is high. Moreover, while this project is one of the first major wind projects off the US coast, many believe that the construction of an extensive transmission line in the Atlantic Seaboard will be a major catalyst for offshore wind investment in the area. With strong winds, the potential to create highly productive wind farms that significantly contribute to the US energy grid is high. Moreover, the shallow waters in the Atlantic Seaboard mean that construction of wind farms would likely be significantly easier and cheaper than similar farms within the great lakes. Overall, compared with other countries, the United States has fallen significantly behind in terms of offshore wind capabilities. Although the United States is the world leader in installed onshore wind capacity, standing at 36.3 gigawatts (GW), it has yet to install any offshore wind. The first offshore wind project -- Cape Wind, a $1 billion 410MW wind farm to be located in Nantucket Sound, off the coast of Massachusetts -- is currently in the final stages of regulatory approval.