Google is taking an investment stake in the construction of a major undersea power network off the mid-Atlantic coast designed to deliver electricity from offshore wind turbines to the Eastern Seaboard, the company announced Tuesday. If the project meets its goals, it will deliver enough energy to power 1.9 million U.S. households.
The overall cost of the project is expected to be $5 billion to $6 billion, according to media reports. Google (GOOG) says it's making a 37.5% investment into the initial $1.2 billion development phase. In an effort to reassure investors, Google noted it expects the project to offer a "solid financial return."
We believe in investing in projects that make good business sense and further the development of renewable energy. We're willing to take calculated risks on early stage ideas and projects that can have dramatic impacts while offering attractive returns. This willingness to be ahead of the industry and invest in large scale innovative projects is core to our success as a company.
The plan is to put offshore wind turbines along the Atlantic coast's continental shelf from Virginia to New Jersey that will deliver power to offshore hubs. These hubs will transfer the electricity via underwater cables to transmission stations based onshore along the coast. The project is expected to deliver 6,000 megawatts -- equivalent to 60% of the wind energy generated throughout the entire U.S. last year.
Google noted the mid-Atlantic was selected for its offshore wind potential and because it lies along one of two National Interest Electric Transmission Corridors that have suffered major network congestion in transferring energy. But while the region has a clear need for the project, its backers will also have to deal with Mother Nature.
The mid-Atlantic coast is a region struck relatively often by hurricanes and tornadoes, which could pose a threat to structures and equipment exposed to the elements. Then again, wind turbines still standing after a hurricane or tornado will undoubtedly generate plenty of electricity.
Other backers of the project include investment firm Good Energies and Japanese trading company Marubeni. The project is being led by Trans-Elect, an independent transmission company.