Google, Marubeni to Lay Cables for U.S. Wind Farm Plan
Google to Invest in Wind-Power Project
Daniel Acker/Bloomberg
Wind-power investment may reach $202 billion within two decades, according to estimates at industry group Global Wind Energy Council.
Wind-power investment may reach $202 billion within two decades, according to estimates at industry group Global Wind Energy Council. Photographer: Daniel Acker/Bloomberg
Rick Needham, director of Google's green business
Andrew Harrer/Bloomberg
Rick Needham, director of green business operations and strategy at Google Inc., center, and Dan Reicher, director of climate change and energy initiatives at Google Inc.,left, listen to Bob Mitchell, chief executive officer of Trans-Elect Development Co.
Rick Needham, director of green business operations and strategy at Google Inc., center, and Dan Reicher, director of climate change and energy initiatives at Google Inc.,left, listen to Bob Mitchell, chief executive officer of Trans-Elect Development Co. Photographer: Andrew Harrer/Bloomberg
Google Inc. said it will invest in a $5 billion underwater transmission network that can harvest electricity from wind farms off the Mid-Atlantic coast and power 1.9 million homes across Virginia, New York and New Jersey.
Google will buy a 37.5 percent stake in the development stage of the Atlantic Wind Connection project, said Rick Needham, director of green business operations at the Mountain View, California-based Internet company. The new transmission line would form the “backbone” of a Mid-Atlantic offshore wind industry that could add 6,000 megawatts of capacity to the grid, Needham said.
The large-scale development of wind farms off the U.S. East Coast may create as many as 212,000 jobs, the project’s developers, including Google, Trans-Elect Development Co., Good Energies Inc. and Tokyo-based Marubeni Corp., said in a statement.
The project, called the “Atlantic Wind Connection,” is needed to lower the cost of sending electricity from offshore wind turbines to the power grid, Bob Mitchell, chief executive officer of Trans-Elect, told reporters.
“There will be no offshore wind industry in this country if we as a team are not successful,” Mitchell said of the project.
The transmission line is to extend from New Jersey to Virginia, Mitchell said in a telephone interview.
More Financing
The first phase of the project, which the developers aim to complete by early 2016, would run about 150 miles and cost between $1.7 billion and $1.8 billion, he said. The second phase to complete the 350-mile line could be finished by 2020, Mitchell said.
Google and Good Energies will each have a 37.5 percent equity stake, he said. Japan’s Marubeni Corp. will have a 15 percent stake. Atlantic Grid Development LLC, a company formed to develop the project whose shareholders include Trans-Elect, will have 10 percent.
Google is “only committing to provide equity for the critical early development stage of the project” in “the tens of millions” of dollars, with the larger project costs being shouldered through a separate financing which is expected to take place in 2013, Jamie Yood, a spokesman for Google, said in an e-mail.
The project will help spur the wind-energy industry in the U.S., which has lagged China in installing turbines, said Charlie Hodges, a wind industry analyst at Bloomberg New Energy Finance in London. Wind-power investment may reach $202 billion within two decades, according to estimates at industry group Global Wind Energy Council.
Equity Stake
“The North American wind industry hasn’t had any players involved with the motivation and financial heft to really move this market forward,” Hodges said. “Google could play that role.”
The U.S. Department of Energy’s National Renewable Energy Laboratory estimated last week in a report that the U.S.’s offshore wind resources total more than 4,000 gigawatts, or roughly four times the country’s existing electric generation capacity.
China will on average install turbines each year from 2009 through 2013 with the capacity to generate 18.7 gigawatts of power from the wind, New Energy Finance estimates. That’s more than double the 8.5 gigawatts annual average in the U.S.
“Each megawatt hour of offshore power carried down that interconnector has more chance of finding buyers, probably improving economics of offshore wind projects connected to it,” Hodges said. “This cable opens up markets and improves the chances of finding a buyer of offshore wind electricity.”
Globally, wind power is expected to account for 22 percent of the world’s electricity generation within two decades, the Global Wind Energy Council said today.
Google, based in Mountain View, California, rose $5.02 to $543.86 at 1:21 p.m. New York Time on the Nasdaq Stock Market. Before today, the shares had dropped 13 percent this year.
To contact the reporters on this story: Young-Sam Cho in Tokyo at ycho2@bloomberg.net; Simon Lomax in Washington at slomax@bloomberg.net
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net.
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