Google, together with New York investment firm Good Energies, is buying a 37.5 per cent stake in a US$5 billion project to build 563 kilometres of underwater transmission lines to pave the way for future wind energy generation projects.
This project is a first of its kind, with an output of 6,000 megawatts, making it the largest wind power project in history.
“This will serve as a clean-energy superhighway, with on-ramps for wind farms and the ability to be intelligently expanded, we can help kick-start an industry that can provide thousands of jobs,” said Rick Needham, Google’s green business operations director, as reported by Reuters.
Needham also added that the project appeals to both the business and environmental communities, as he said the project “offers a solid financial return while helping to accelerate offshore wind development — so it’s both good business and good for the environment.”
According to Jon Wellinghoff, chairman of the Federal Energy Regulatory Commission in the U.S., the project is a big event. “Conceptually it looks to me to be one of the most interesting transmission projects that I’ve ever seen walk through the door. It provides a gathering point for offshore wind for multiple projects up and down the coast.”
With the world becoming increasingly aware of the need to transition to alternative sources of energy, it is good to see a corporation like Google step to the forefront. With so many governments throughout the world cutting back on spending and entering an era of austerity, it will increasingly fall upon private individuals and private corporations to fill the gap when it comes to investments in the economy of the future.
This investment, though large, is just a first step towards meeting the resource concerns of the future. With populations rising throughout the world, and the explosive growth of the middle class in China and India, demand for new sources of energy will only continue to increase for the foreseeable future. If steps are not taken towards a diversification of our resource base, there could be disastrous consequences for the world.
One concerning factor about this investment, however, is whether Google is following the failed example of General Motors.
For many years General Motors was the world’s largest manufacturer, and it grew to massive proportions far beyond the automobile industry. Some believe that GM’s expansion into banking and other areas beyond its core business, as well as its unwieldy size and inflexibility, was a cause of its eventual decline and bankruptcy. Google is clearly not content with merely being a search engine as it is seeking to expand its role to many sectors. Some Google investors are concerned about this expansion, as often happens when a company begins to move beyond its core business. In addition to this project, Google is also investing in solar power and a self driving car.
As Google is finding out, when a company grows and its financial base expands, it can be easy to seek out further reach into new markets and sectors. The problem that seems to arise, and did in the case of General Motors, is when a company grows so large and unwieldy that it loses sight of what made it successful in the first place. In the case of General Motors, they lost sight of building quality cars, and with their core business weakened, the entire company collapsed, only to be saved by a bailout.
Google is taking a great step by investing in the energy technology of the future, but it must be mindful of their core business and purpose and make sure it remembers why everyone knows them today.