Google will invest $55 million to finance a section of a 1.55-gigawatt wind farm being built in California, raising the amount of money the Internet search giant has spent into clean energy projects to $400 million.
The money will finance the fourth phase of the Alta Wind Energy Center being developed by North
Carolina-based Terra-Gen Power, L.L.C. in the Tehachapi Mountains. In a blog post, Google said Citibank, which has served as underwriter for the earlier phases of the wind farm, will also be investing $55 million in the 102-MW Alta IV project.
To be composed of five sections, the first segments of the Alta project are already generating 720 megawatts of energy. Another 300 MW of capacity is expected to go online by the end of the year, putting Alta’s total capacity at 1,020 MW.
When complete, the wind farm will generate 1.55 GW in total, enough to power 450,000 homes, which will be supplied to Southern California Edison under a power purchase agreement signed in 2006.
Alta Wind is expected to increase the number of wind industry-related jobs in the state by 20 percent while feeding more than $1.2 billion into the Kern County economy, according to Terra-Gen.
The project will use a new transmission line developed as part of the 4,500-MW Tehachapi Renewable Transmission Project, California’s first major transmission project built primarily to transport electricity from remote, renewable energy projects in the Tehachapi region to population centers in Southern California and elsewhere.
Google will not be purchasing the electricity from this project. Instead, together with Citibank, it will buy Alta IV when it goes online and lease it back to Terra-Gen, a financing structure called a leveraged lease.
A popular option in the solar industry, the setup will allow Terra-Gen to pay back its investors by operating the wind project under long-term agreements.
“We hope this structure encourages more investment by enabling other types of investors who might not typically consider wind projects,” Rick Needham, director of green business operations for Google, said.
From wind to solar
When the Alta Wind Energy Center comes on stream, it should help California reclaim its title as wind leader aside from being a prime destination for solar projects.
California actually led the way in wind energy in the industry’s early years. According to a report from the Center of Energy Efficiency and Renewable Technologies released in 2008, the state boasted 90 percent of the world’s wind power market in 1988.
Twenty years later, the trade group said the state’s market share on wind power fell to less than 4 percent of world market share, despite a mandate to have 33 percent of its electricity from renewable energy sources by 2020.
“Federal and state tax incentives for wind were allowed to expire, long before a young, rapidly growing industry was ready to stand on its own, James Walker, vice chairman of EnXco, Inc., said in article published by Mercury News on May 19.
Currently, the state gets just 3.3 percent of its electricity from wind, compared with 15.4 percent in Iowa and 6.4 percent in Texas, according to the American Wind Energy Association’s annual report for 2010.
Google’s green appetite
With the Alta IV investment, Google said it has pumped more than $400 million into clean energy projects, which is outside its core internet business.
Google, which has been expanding its green portfolio since last year, said its $168 million investment in Ivanpah solar project is the company’s single largest to date. The 392 MW solar thermal power plant is said to be the largest of its kind in the world, being built by startup BrightSource Energy in California’s Mojave Desert.
Most of its investments finance various wind energy projects across the United States. The largest of its wind investment is $100 million also made last month for the 845-MW Shepherds Flat project. Under construction in Oregon, it is said to be the world’s largest wind farm.
Google also invested $38.8 million in two projects in North Dakota in May last year. The 120-MW Ashtabula 2 project in Barnes County and the 49.5-MW Wilton Wind 2 project in Burleigh County were developed by NextEra Energy Resources, a subsidiary of FPL Group, Inc.
The company’s first deal for its subsidiary Google Energy – which can buy and sell power on the wholesale electricity markets – was with an operational 114-MW wind farm in Iowa in July 2010. Its second deal was signed in April 2011 with a 100.8-MW wind farm under construction in Oklahoma. Both facilities are owned by NextEra.
Google even invested 37.5 percent in equity last October 2010 in the Atlantic Wind Connection. The 350-mile transmission line to be built off the coast from New Jersey to Virginia will be able to connect 6,000 megawatts of offshore wind turbine power. The United States Federal Energy Regulatory Commission recently approved a rate of return for the project at 12.59 percent for its investors.
The rest of the company’s investments in green are small start-ups through Google Ventures and Google.org. Most of them are linked to the transportation industry, including battery maker ActaCell, electric vehicle maker Aptera, fuel-efficient car maker Next Autoworks and car sharing company RelayRides.
The company also invested in geothermal company Alta Rock, weather insurance company WeatherBill, smart grid company Silver Spring Networks and efficient power conversion modules startup Transphorm.
