By Scott Malone
BOSTON, Oct 12 (Reuters) - Google Inc has thrown its financial clout behind an ambitious $5 billion proposed electric transmission line intended to spark investment in new wind farms off the heavily populated U.S. East Coast.
The move, which comes at a time when about a dozen wind projects have been proposed off the eastern United States but none have been built, marks the Internet search giant's latest move away from its core business, joining investments in solar energy and a plan to develop a car that will drive itself.
Japan's Marubeni Corp and New York investment firm Good Energies are joining in financing the planned 350-mile (563 km) underwater electric cable, which will be led by transmission-line developer Trans-Elect. It will help developers of offshore wind projects to surmount a major cost challenge -- connecting their turbines to the grid in a way that allows them to sell to multiple customers.
'This will serve as a clean-energy superhighway, with on-ramps for wind farms and the ability to be intelligently expanded,' Rick Needham, Google's green business operations director, told a news conference in Washington. 'We can help kick-start an industry that can provide thousands of jobs.'
While the renewable energy industry welcomed the move, some pointed out that transmitting power from offshore turbines to the coast is only one of the many roadblocks facing developers. They also face a complex permitting process, which has dragged on for almost a decade for one proposed wind farm off Cape Cod, Massachusetts, and unclear energy and environmental policies in Washington, where Congress looks unlikely to pass a comprehensive climate bill for the rest of President Barack Obama's current term in office.
'Certainly, transmission is one of the major challenges for offshore, but in the long term a bigger challenge is long-term stable policy,' said Matt Guyette, global strategy leader for renewable energy at General Electric Co, one of the world's top producers of wind turbines. 'The one thing that will grow investment the most is a long-term renewable energy standard.'
Renewable energy standards are regulations that require utilities to buy a certain percentage of their electricity from renewable sources like wind and solar installations. Several eastern states have them but there is no national standard.
BACKUP TO GRID
In addition to allowing expected offshore wind turbines to transmit their electricity to the coast, the Atlantic Wind Connection project would stretch from Virginia to New Jersey and could serve as a backup to the onshore transmission grid.
It could help grid operators avoid or more quickly recover after incidents such as the major blackout that plunged parts of the northeastern United States and Canada into darkness for days in 2003, Trans-Elect Chief Executive Bob Mitchell said.
The companies' initial investment in the project amounts to tens of millions of dollars, executives said on a conference call. Trans-Elect expects the first segment of the project, which should begin building in 2013, to cost $1.8 billion.
Google described its initial 37.5 percent stake in the project as 'early stage,' leaving open the possibility other investors or lenders would be brought in to finance the actual construction -- a costlier proposition.
Current U.S. wind farms can generate 35.6 gigawatts of electricity, enough to meet the needs of about 9.7 million homes, according to the American Wind Energy Association. Texas, Iowa and California have the most installed capacity.
The densely populated East Coast has fewer turbines, in part because of a lack of open space for them. Offshore installations, advocates argue, can generate electricity close to major population centers without also producing the greenhouse gases associated with global climate change.
The cable would be able to transmit about 6 gigawatts of electricity, which would meet the needs of some 1.9 million households. The project is only a transmission line, meaning other investors would have to finance and build the offshore wind farms it would serve.
FAR OFFSHORE
The proposed cable would be installed under the seabed, 15 miles to 20 miles (24 km to 32 km) offshore. That would make turbines all but invisible from the coast and head off one of the major complaints that have dogged Cape Wind, which first proposed a project in 2001.
Opponents of Cape Wind have raised concerns that the turbines could mar the views from the tourist-dependent Cape Cod region of Massachusetts, as well as interfere with fisheries and injure migrating birds.
Offshore wind on the East Coast could generate about 127 gigawatts of power, enough to meet half of those states' current electric demand, according to a recent study by ocean conservation group Oceana. About a dozen offshore wind farms are proposed for the region.
The grid would save developers who build installations near it the cost and complexity of building their own transmission lines that reach all the way to shore.
'It could be a game-changer for offshore wind,' said Sheeraz Haji, managing partner at the Cleantech Group, a San Francisco-based research firm. 'Offshore transmission is an area that has been very difficult for many investors to get their heads around.'
Google shares were up 0.4 percent at $541.110 in afternoon trading.
(Reporting by Scott Malone, additional reporting by Risa Maeda in Tokyo; Editing by Edmund Klamann, Maureen Bavdek, Lisa Von Ahn, Andre Grenon and Phil Berlowitz) Keywords: GOOGLE/WIND (boston.newsroom@thomsonreuters.com; +1 617-856-4342; reuters messaging: scott.malone.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BOSTON, Oct 12 (Reuters) - Google Inc has thrown its financial clout behind an ambitious $5 billion proposed electric transmission line intended to spark investment in new wind farms off the heavily populated U.S. East Coast.
The move, which comes at a time when about a dozen wind projects have been proposed off the eastern United States but none have been built, marks the Internet search giant's latest move away from its core business, joining investments in solar energy and a plan to develop a car that will drive itself.
Japan's Marubeni Corp and New York investment firm Good Energies are joining in financing the planned 350-mile (563 km) underwater electric cable, which will be led by transmission-line developer Trans-Elect. It will help developers of offshore wind projects to surmount a major cost challenge -- connecting their turbines to the grid in a way that allows them to sell to multiple customers.
'This will serve as a clean-energy superhighway, with on-ramps for wind farms and the ability to be intelligently expanded,' Rick Needham, Google's green business operations director, told a news conference in Washington. 'We can help kick-start an industry that can provide thousands of jobs.'
While the renewable energy industry welcomed the move, some pointed out that transmitting power from offshore turbines to the coast is only one of the many roadblocks facing developers. They also face a complex permitting process, which has dragged on for almost a decade for one proposed wind farm off Cape Cod, Massachusetts, and unclear energy and environmental policies in Washington, where Congress looks unlikely to pass a comprehensive climate bill for the rest of President Barack Obama's current term in office.
'Certainly, transmission is one of the major challenges for offshore, but in the long term a bigger challenge is long-term stable policy,' said Matt Guyette, global strategy leader for renewable energy at General Electric Co, one of the world's top producers of wind turbines. 'The one thing that will grow investment the most is a long-term renewable energy standard.'
Renewable energy standards are regulations that require utilities to buy a certain percentage of their electricity from renewable sources like wind and solar installations. Several eastern states have them but there is no national standard.
BACKUP TO GRID
In addition to allowing expected offshore wind turbines to transmit their electricity to the coast, the Atlantic Wind Connection project would stretch from Virginia to New Jersey and could serve as a backup to the onshore transmission grid.
It could help grid operators avoid or more quickly recover after incidents such as the major blackout that plunged parts of the northeastern United States and Canada into darkness for days in 2003, Trans-Elect Chief Executive Bob Mitchell said.
The companies' initial investment in the project amounts to tens of millions of dollars, executives said on a conference call. Trans-Elect expects the first segment of the project, which should begin building in 2013, to cost $1.8 billion.
Google described its initial 37.5 percent stake in the project as 'early stage,' leaving open the possibility other investors or lenders would be brought in to finance the actual construction -- a costlier proposition.
Current U.S. wind farms can generate 35.6 gigawatts of electricity, enough to meet the needs of about 9.7 million homes, according to the American Wind Energy Association. Texas, Iowa and California have the most installed capacity.
The densely populated East Coast has fewer turbines, in part because of a lack of open space for them. Offshore installations, advocates argue, can generate electricity close to major population centers without also producing the greenhouse gases associated with global climate change.
The cable would be able to transmit about 6 gigawatts of electricity, which would meet the needs of some 1.9 million households. The project is only a transmission line, meaning other investors would have to finance and build the offshore wind farms it would serve.
FAR OFFSHORE
The proposed cable would be installed under the seabed, 15 miles to 20 miles (24 km to 32 km) offshore. That would make turbines all but invisible from the coast and head off one of the major complaints that have dogged Cape Wind, which first proposed a project in 2001.
Opponents of Cape Wind have raised concerns that the turbines could mar the views from the tourist-dependent Cape Cod region of Massachusetts, as well as interfere with fisheries and injure migrating birds.
Offshore wind on the East Coast could generate about 127 gigawatts of power, enough to meet half of those states' current electric demand, according to a recent study by ocean conservation group Oceana. About a dozen offshore wind farms are proposed for the region.
The grid would save developers who build installations near it the cost and complexity of building their own transmission lines that reach all the way to shore.
'It could be a game-changer for offshore wind,' said Sheeraz Haji, managing partner at the Cleantech Group, a San Francisco-based research firm. 'Offshore transmission is an area that has been very difficult for many investors to get their heads around.'
Google shares were up 0.4 percent at $541.110 in afternoon trading.
(Reporting by Scott Malone, additional reporting by Risa Maeda in Tokyo; Editing by Edmund Klamann, Maureen Bavdek, Lisa Von Ahn, Andre Grenon and Phil Berlowitz) Keywords: GOOGLE/WIND (boston.newsroom@thomsonreuters.com; +1 617-856-4342; reuters messaging: scott.malone.thomsonreuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.