On October 11, 2010 Google officially announced its investment in the Atlantic Wind Connection for tens of millions of dollars. The Atlantic Wind Connection is a project funded by Google, Good Energies, and the Marubeni Corporation who according to The Wall Street Journal have teamed up to provide funding for the building of a transmission line for wind generated energy. The Atlantic Wind Connection is expected to begin construction in 2013 and is projected to be completed by 2020.
The project itself is broken up into five sections with Google, Good Energies, and the Marubeni Corporation pledging to invest in the first section of the project with the possibility of funding the rest as well. When completed it is expected to provide power for approximately 1.9 million households spanning 350 miles from Virginia to New Jersey. The Atlantic Wind Connection would eliminate the need for offshore wind developers to build their own transmission lines and according to The Wall Street Journal lowering costs by 17-20% for offshore wind developers. The Atlantic Wind Connection, according to Google and The Wall Street Journal, has chosen the mid-Atlantic region of the United States to build this project because it has shallower water off the coast and would be easier to build a transmission line going out 10 to 15 miles to sea.
I think that the Atlantic Wind Connection is a risky investment because of the possible financial and regulatory drawbacks. One such hindrance being that the project is projected to cost over 5 billion dollars when completed. In addition acquiring government permission to build the transmission line will be an obstacle as the United States last week approved, for the first time ever, the construction of a commercial wind development. Also the permission process will require going through various different sectors of government including Federal Energy Regulatory Commission among others. This brings up the question of whether the Atlantic Wind Connection with these impediments will be able to be completed by 2020 and if Google and the other firms will still be willing to invest at that juncture in time. Overall, the project while promising does not appear to be worth the approximately five billion dollars that it may be worth upon completion with so many chances to falter along the way.
Sources: http://online.wsj.com/article/SB10001424052748703440004575547381873787098.html?mod=WSJ_Energy_leftHeadlines
http://googleblog.blogspot.com/2010/10/wind-cries-transmission.html
I believe the possible drawbacks of this project are not terribly severe given the nature of offshore wind ventures. The price of completing the project, $5 billion, is minuscule compared to the current series of offshore wind projects in Germany and the United Kingdom (in the UK alone, there development costs are $150 billion). The recent approval of the construction of the first offshore wind project in the US is something that seems to be a reassuring sign that the US government is finally ready to dip its feet into the vast untapped resources we have off of our shoreline. It will be interesting to see how Google's role in this project will turn out, and how successful the project will be, but, looking at Google's track record, I have little doubt that they will be able to breeze through successfully.
ReplyDeleteSource: http://www.reuters.com/article/idUS90650730020101013
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