Google wades into wind farms with $42m

Australian
Wednesday 5/5/2010 Page: 33

Google has invested $US38.8 million ($42m) in two North Dakota wind farms, the internet giant's first direct investment in utility-scale renewable energy generation. The company said in a blog post that it invested in wind farms built by NextEra Energy Resources, a unit of FPL Group. The wind turbines, made by General Electric, generate 169.5MWs of power, enough to serve more than 55,000 homes. The investment marks a departure from Google's initial approach to renewable energy, which focused on investing in early stage renewable energy companies such as BrightSource Energy, eSolar and AltaRock Energy, which are developing new solar, wind and geothermal power technologies.

Google said it was investing directly in energy projects to accelerate the deployment of the latest clean-energy technology, while providing attractive returns to Google and m ore capital for developers to build additional projects. "We're aiming to accelerate the deployment of renewable energy in a way that makes good business sense, too," wrote Rick Needham, Google's green business operations manager. Google's stakes in the wind farms are in the form of "tax equity" investments, in which investors take over a project and use federal tax credits granted to the project to offset their own taxes as a return.

NextEra Energy Resources said it sold approximately $US190m of Class-B membership interests in the two wind farms, with Google's stake representing about 20% of the Class-B shares. The companies didn't immediately disclose the other investors. The projects include a AFP 120MW wind farm in Barnes County, North Dakota, called Ashtabula 2, and a 49MW wind facility called Wilton Wind 2, in Burleigh County, also in North Dakota.

The output from the facilities, which have been operating since last year, is being sold to utilities under power purchase agreements. A Google spokesman said the electricity generated by the wind farms would not be used to power any of the company's data centres. While Google's NextEra Energy Resources investment is not intended to finance any expansion at Ashtabula and Wilton,the internet giant hopes its investment will enable the energy group to invest in additional wind power projects.

The wind farms are among more than 1(),()()()M W of wind power facilities built across the US last year, according to the American Wind Energy Association. NextEra Energy Resources, which owns more than 7500MW of wind farms, is the nation's top wind power generator. It also owns nearly 12,000MW of mostly nuclear and natural-gas fired power generation.

In California, where Google is head quartered, utilities are requited to use renewable sources for a fifth of the power they sell by the end of this year, with the mandate set to expand to one-third renewables by 2020 under pending regulations. Thirty-one other states, and Washington DC, have renewable power requirements or goals, according to the US Department of Energy. In 2008, about 7% of US power supplies came from renewable sources.