Jul 26 2012

A Googol of Watts

Published by under Student blog entries

Google is joining forces with Good Energies, the Japanese trading firm Marubeni and the Maryland transmission company Trans-Elect to lay a massive offshore transmission line along the Atlantic coast. This electricity “backbone” is the first such private investment of its kind in the US.

Much of the financial impetus behind the renewable energy market in the US right now is backed by government subsidies, in the form of tax subsidies or taxpayer-credited investments.

Google’s investment in this project is noteworthy for several reasons. The investment made headlines because Google backed it. Without the might of Google as a media magnet, the “electricity spine” would not be as popular as it is. Because the investment is in the media, more investors will be attracted to the idea, and pool their money; this will lower the risk for all involved- high risk is the very reason that private investors have traditionally shied away from the renewable energy sector. And while the transmission lines are intended for use by very large wind farms, Google and its partners are not building any wind turbines. The transmission lines are intended to be viewed by wind farm developers as pre-clearing the expensive hurdles of permitting and laying their own transmission lines.

However, some states are worried.

Politicians in New Jersey and other states are crying foul; New Jersey, for example, passed a law that say that NJ power companies must produce 20% of their electricity from renewable sources by 2020. New Jersey politicians are worried that, with the new, offshore transmission line, wind farms built off their shores may instead power other regions of the East Coast, regions with more competitive power rates.

This seems to be the very best reason to install the power line. It will encourage the development of offshore wind farms, and, because it will facilitate the large-scale distribution of energy, will benefit wind farms by subjecting their development to direct market demand, instead of shielding them, as government subsidies have.

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