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Google investing in offshore power grid in Atlantic

Project would carry electricity from wind farms

A NOVEL APPROACH Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission, said the project was “most interesting.” A NOVEL APPROACH
Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission, said the project was “most interesting.”
By Matthew L. Wald
New York Times / October 12, 2010

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WASHINGTON — Google and a New York financial firm have each agreed to invest heavily in a proposed $5 billion transmission backbone for future offshore wind farms along the Atlantic Seaboard that could ultimately transform the region’s electrical map.

The 350-mile underwater spine, which could remove some critical obstacles to wind power development, has stirred excitement among investors, government officials, and environmentalists who have been briefed on it.

Google and Good Energies, an investment firm specializing in renewable energy, have each agreed to take 37.5 percent of the equity portion of the project. They are likely to bring in additional investors, which would reduce their stakes.

If they hold on to their stakes, that would come to an initial investment of about $200 million apiece in the first phase of construction alone, said Robert L. Mitchell, chief executive of Trans-Elect, the Maryland-based transmission-line company that proposed the venture.

Marubeni, a Japanese trading company, has taken a 10 percent stake. Trans-Elect said it hoped to begin construction in 2013.

Several government officials praised the idea underlying the project as ingenious, while cautioning that they could not prejudge the specifics.

“Conceptually, it looks to me to be one of the most interesting transmission projects that I’ve ever seen walk through the door,’’ said Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission, which oversees interstate electricity transmission. “It provides a gathering point for offshore wind for multiple projects up and down the coast.’’

Industry experts called the plan promising, but warned that as a first-of-a-kind effort, it was bound to face bureaucratic delays and could run into unforeseen challenges, from technology problems to cost overruns. Although several undersea electrical cables exist off the Atlantic, none has ever picked up power from generators along the way.

The system’s backbone cable, with a capacity of 6,000 megawatts, equal to the output of five large nuclear reactors, would run in shallow trenches on the seabed in federal waters 15 to 20 miles offshore, from northern New Jersey to Norfolk, Va. The notion would be to harvest energy from turbines in an area where the wind is strong but the hulking towers would barely be visible.

Trans-Elect estimated that construction would cost $5 billion, plus financing and permit fees. The $1.8 billion first phase, a 150-mile stretch from northern New Jersey to Rehoboth Beach, Del., could go into service by early 2016, it said. The rest would not be completed until 2021 at the earliest.

Richard L. Needham, director of Google’s green business operations group, called the plan “innovative and audacious.’’

“It is an opportunity to kick-start this industry and, long term, provide a way for the mid-Atlantic states to meet their renewable-energy goals,’’ he said.

Yet even before any wind farms were built, the cable would channel existing supplies of electricity from southern Virginia, where it is cheap, to northern New Jersey, where it is costly, bypassing one of the most congested parts of the North American electric grid while lowering energy costs for northern customers.

Generating electricity from offshore wind is far more expensive than relying on coal, natural gas, or even onshore wind. But energy experts anticipate a growing demand for the offshore turbines to meet state requirements for greater reliance on local renewable energy as a clean alternative to fossil fuels.

Four connection points — in southern Virginia, Delaware, Southern New Jersey, and Northern New Jersey — would simplify the job of bringing the energy onshore, involving fewer permit hurdles. In contrast to transmission lines on land, where a builder may have to deal with hundreds of property owners, this project would have to deal with a maximum of just four, and fewer than that in its first phase.

Ultimately the system, known as the Atlantic Wind Connection, could make building a wind farm offshore far simpler and cheaper than it looks today, experts said.

Environmentalists who have been briefed on the plan were enthusiastic. Melinda Pierce, deputy director for national campaigns at the Sierra Club, said she had campaigned against proposed transmission lines that would carry coal-fired energy around the country, but would favor this one, with its promise of tapping the potential of offshore wind.