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Monday, May 10, 2010

Two Wind Farms get Investment from Google

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Now big companies are going green and proudly proclaiming it too from rooftops. Google Inc. has invested $38.8 million in two North Dakota wind farms. This is the first direct investment by Google in utility-scale renewable energy generation. These two wind farms produce 169.5 megawatts of power. These two wind farms can light up around 55,000 homes. These wind farms are designed by General Electric Co and created by NextEra Energy Resources. They generate power from one of the world’s richest wind resources in the North Dakota plains. There is no need to lay down extra infrastructure for the two wind farms. Current transmission facilities are able to transmit power to the nearby areas. Google’s official blog claims, “Through this $38.8 million investment, we’re aiming to accelerate the deployment of renewable energy — in a way that makes good business sense, too.”
Earlier Google Inc. has invested in companies which are developing new technologies in the area of solar, wind and geothermal power. Such companies are BrightSource Energy, eSolar and AltaRock. With North Dakota wind farms Google made an exception.
Google’s stakes in the wind farms are in the form of “tax equity” investments. This way Google will be able to avail the benefit of use federal tax credits provided by the Government. According to this incentive the investors also take over a project and use federal tax credits to offset their own taxes as a return.
According to NextEra they sold about $190 million of Class B membership interests in the two wind farms. Now Google’s stake is around 20% of the Class B shares. The companies are not talking about the other investors currently. While Google’s NextEra investment doesn’t include to help in future expansion of the company but they hope that their investment would help in establishing additional wind power projects.
The power production from the wind farms would be sold to utilities under power purchase agreements. A Google spokesman claimed that their data centers won’t be using the power generated by wind farms.
The wind farms are willing to experiment with new technologies. They want to go for the cutting edge turbine technologies and new kind of the control systems that can continuously monitor output from every turbine and always adjust individual blade angles to improve efficiency. They would also use the blades that are 15 per cent larger on the usual turbines.
Rick Needham is the green business operations manager at Google. He says, “Smart capital includes not only these early-stage company investments, but also dedicated funding for utility-scale projects. To tackle this need, we’ve been looking at investments in renewable energy projects, like the one we just signed, that can accelerate the deployment of the latest clean energy technology while providing attractive returns to Google and more capital for developers to build additional projects.”
Google has also indicated earlier this year that it may play a more direct role in the US energy market. Google Inc. has made a request with the Federal Energy Regulatory Commission (FERC) that would help it to buy and sell electricity on the wholesale market. This has made green energy analysts curious about Google’s future role in clean and green energy scene.
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