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Google to invest in offshore wind power project

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NEW YORK -- Google and a handful of other companies are investing in a proposed $5 billion network of underwater transmission lines that could bring power from future offshore wind farms to customers along the East Coast.

The project, the Atlantic Wind Connection, would run electrical lines as far as 20 miles offshore from Virginia to New Jersey. The initial phase of the project would be capable of delivering 2,000 megawatts of wind energy -- enough to power about 500,000 homes.

Wind turbines aren't part of the project. Instead, the companies hope that by saving developers the cost of lining the sea floor with electrical cables able to deliver wind power to shore, they'll jump-start the building of offshore wind farms along the coast.

The lack of transmission capability has been a major obstacle to wind energy development in the United States.

"Instead of multiple piecemeal connections, this will serve as a superhighway with on-ramps for wind farms," said Rick Needham, Google's (Nasdaq: GOOG) green business operations director.

The United States is only beginning to develop projects to tap strong wind currents blowing along the Atlantic Coast. There are currently no wind turbines operating in the waters off the eastern United States. Cape Wind, offshore of Massachusetts, was granted a lease earlier this month after a decade-long battle. But construction will take two years once it gets under way.

Besides Google, investment firm Good Energies, Japanese industrial conglomerate Marubeni and Maryland transmission company Trans-Elect are involved in the project.

Needham said the combined initial investment in the project ran in the tens of millions of dollars.

Trans-Elect CEO Robert L. Mitchell said the first phase is expected to cost $1.8 billion and run 150 miles (240 kilometers) in federal waters from New Jersey to Delaware. That phase, he said, will be complete by early 2016.

Google and Good Energies will each own 37.5 percent of the project and Google said it plans to find other investors. Marubeni will own 15 percent. A group led by Trans-Elect will own the remaining 10 percent, Mitchell said.

Longbow Research analyst Eli Lustgarten said the project could be critical for the offshore wind industry, bringing investors with deep pockets and a plan to add an extensive transmission network.

But the project's success if far from certain, he said. It still needs regulatory approval and is expected to take a decade to build. During that time, organizers say it may transmit at least some electricity that was generated from coal.

"You have to develop the technology and put the wind offshore," Lustgarten said. "Ten years is a long time from now."

Scott Jennings, president of PSEG Global, which has been working to build wind facilities off the New Jersey coast, criticized the project. Jennings questioned the project's high cost and whether the region needed that big of a transmission network.

"It would be better to focus our resources on actually building wind turbines and generating renewable wind energy," Jennings said in a statement.

Mitchell said the new project will not change ocean views from shore because the wind turbines will be so far out to sea.

The network would tie into PJM Interconnection, an electrical grid that ties into mid-Atlantic states and Washington, D.C.

Construction could begin as soon as 2013, and when completed, it could handle as much as 6,000 megawatts of energy, enough to supply 1.9 million homes.

The energy is expected to cost several times more than conventional electricity, but Needham said Google still sees offshore wind as an attractive long-term investment.

In May, Google made its first direct investment in clean energy, buying a $38.8 million stake in two North Dakota wind farms.

Google has also been trying to rely on renewable energy sources for its data centers, whose demands for power are increasing as the company sets up more computers in its bid to index all of the world's online data.

AP Technology Writer Barbara Ortutay contributed to this report.

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