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Google Backing U.S. Offshore Wind Power

Stocks in this article: GOOG

NEW YORK ( TheStreet) -- Google the words "wind power" on Tuesday and search results may be all about the search engine giant. Google (GOOG) announced on its official blog Monday evening that it signed an agreement to invest in the development of a backbone transmission project off the Mid-Atlantic coast to accelerate offshore wind development.

The Atlantic Wind Connection backbone will stretch 350 miles off the coast from New Jersey to Virginia and will be able to connect 6,000 megawatts of offshore wind turbines. The Google blog post from the search giant's Green Business Operations Director, Rick Needham, stated that the project would equal 60% of the wind energy that was installed in the entire country last year and enough to serve about 1.9 million households.

Google is positioning the project as good for the grid, good for job growth, and good for the environment.

The U.S. wind market could use the help, too. This year has been one of the worst for the development of wind power in the U.S., with terrestrial wind power installations reaching a nadir and stocks in the wind sector seeing large share value declines, such as Broadwind Energy (BWEN). Only two new wind power manufacturing facilities went online in 2010 through July, the lowest level of new manufacturing activity for the U.S. wind power business in years, according to a mid-year report from the American Wind Energy Association.

The Google project is notably focused on the offshore wind market, which has been growing while the terrestrial wind market in the U.S. has slowed. In the U.K., for example, the largest offshore wind farm was built this year, and many companies, including General Electric (GE) have been focusing more on the global offshore wind project business.

The largest terrestrial wind project planned in the U.S., by A-Power Energy Generation Systems (APWR) is a 600 MW project and is still in the planning stages.

Google's plan is that by putting the undersea transmission line in place it will remove a major barrier to scaling up offshore wind, which it noted in its blog post still does not exist in the U.S., other than one federally approved lease.

Of course, it's a long way from announcing a major wind power project to actually completing it, and the road for Google and its financial partners will include the usual bureaucratic hurdles, from uncertain government support in the form of tax credits and subsidies, to federal vs. state offshore rights and the fact that wind power, while cheaper than solar, remains a more expensive form of energy than conventional fuel sources. Additionally, wind power is an intermittent source and that poses problems for the reliable delivery of energy.

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