As Greg noted below, the Gray Lady published an almost-gushing article about Google and Good Energies investing in a bold off-shore wind farm project. The turbines will trace a $5 billion transmission backbone with over 6,000 megawatts in carrying capacity, running from Norfolk, Virginia., to northern New Jersey.
An impressive idea. But the numbers are weird. Consider some rough calculations derived from the cost projections of another, similar project, Cape Wind. It’s projected to produce a maximum of 454 megawatts of power with 130 turbines, for an estimated cost of $2.5 billion. That means roughly 3.5 megawatts and $19 million per turbine
Now, apply those numbers back to Google and Good Energies’ project. In order to produce 6,000 megawatts, they would need about 1,700 turbines, for a cost of over $32 billion. These are some sketchy numbers — nobody’s seriously proposed 1,700 turbines off the coast, nor is it clear where the extra $27 billion would come from.
So, what’s really going on here? The NYT reporter reveals what is probably the real explanation, if unwittingly:
Yet even before any wind farms were built, the cable would channel existing supplies of electricity from southern Virginia, where it is cheap, to northern New Jersey, where it is costly, bypassing one of the most congested parts of the North American electric grid while lowering energy costs for northern customers.
The most reasonable explanation is that this project isn’t really about the turbines, but about the backbone — it would be operational before the turbines start spinning, and able to make a heavy, heavy profit for the progressive and conscientious investors at Google and Good Energies with the substantial arbitrage opportunity created by the disparate energy prices between North and South on the east coast.
Granted, that doesn’t mean Google is going against its mantra to not be evil. The backbone itself may be a good idea — it would make the energy market a bit freer by reducing transaction costs (something we can all applaud). But it’s doubtful that this is really about green energy. Some PR officer put some impressive spin into those turbines . . .
H/T to anonymous friends.