Google breezes into wind energy industry

Google has made its first direct investment in utility-scale renewable energy generation, providing $38.8m (£25.5m) to two North Dakota wind farm projects.

The search giant said in a blog post on Monday that it had invested in two farms built by NextEra Energy Resources, which together will provide 170MW of wind energy capacity.

The wind farms are expected to use cutting-edge turbine technologies, pioneering the use of control systems that can constantly monitor output from each turbine and continuously adjust individual blade angles to improve efficiency and enable the use of blades that are 15 per cent larger than on standard turbines.

Rick Needham, green business operations manager at Google, admitted that the investment marked something of a shift in the company's green investment strategy after its earlier funding for a number of high-profile renewable energy start-ups.

"We have been dedicating resources to developing new technologies, including making investments in early-stage renewable energy companies such as eSolar and AltaRock," he said. "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'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 – the top US wind power generator with 7.5GW – said it sold approximately $190m of Class B membership interests in the two wind farms, and Google's stake represents about 20 per cent of the Class B shares. Other investors were not disclosed.

Experts have speculated for several years that Google will ultimately invest directly in large-scale renewable energy projects. The company's datacentres are among the largest corporate consumers of electricity in the world and the firm has long maintained that it is in its interests to secure affordable supplies of renewable energy.

In November 2007, its philanthropic arm Google.org announced its RE<C (Renewable Energy Cheaper Than Coal) initiative, a project that has pledged to invest several hundred million dollars to support the development of renewable energy that is cheaper than energy produced from fossil fuels.

Under the project, the firm is already investing heavily in research in utility-scale solar thermal energy and innovative forms of wind power.

Google has also signalled that it may play a more direct role in the US energy market, and it was revealed earlier this year that the company has lodged a request with the Federal Energy Regulatory Commission (FERC) which would allow it to buy and sell electricity on the wholesale market, prompting analysts to speculate that the firm may ultimately become a supplier of green energy.