Wind energy just got a nice bump. It came after a key federal agency authorized a project funded in part by Google to lay the groundwork for an underwater power line. The off-shore wind deal, known as the Atlantic Wind Connection, could start putting steel in the ocean by 2014.

Clean energy has been given a thumping from its opponents in recent months. And while this $5 billion project would be getting its money from private investors, it would still rely on the same kinds of tax breaks provided to developers of wind -- programs that are set to expire by year-end. At issue is whether the country wants more wind and if so, does it want to invest public resources off-shore.

The Atlantic Wind Connection would take place over at least 10 years and would have the potential of delivering 7,000 megawatts of wind energy to states along the East Coast, some of which have set renewable portfolio standards. That would increase the venture's attraction despite being considerably more expensive than on-land generation.

“This decision is an important step to advancing what could be the world’s first integrated electric transmission superhighway for offshore wind,” says Bob Mitchell, chief executive of Trans-Elect, which is partnering with not just Google but also Good Energies and Japanese trading firm, Marubeni.

The Department of Interior’s Bureau of Ocean Energy Management granted its permission to build the underwater line that will eventually stretch 380 miles from Virginia to New Jersey. The agency’s review concludes that no other similar competitors exist in that region that would object to giving the developers rights-of-way. Other federal and state permits are still necessary.

The project, of course, can’t avoid the comparisons to Cape Wind, which has been encumbered in legal battles for a decade but which may start producing power in 2014. The Atlantic wind deal has broader public and political support.

Still, the cost of the project could end up being enormous, or potentially twice as much as a land-based deal. The investors, though, are factoring in potential subsidies and tax benefits as well as tougher environmental regulations dealing with carbon emissions -- calculations that have likely diminished in recent months and which may alter their decision making. 

Building Blocks

Under the National Offshore Wind Strategy, the U.S. Department of Energy wants to have 10,000 megawatts of offshore wind generating capacity by 2020 and 54,000 by 2030. Those scenarios include development in both federal and state offshore areas, including along Atlantic, Pacific and Gulf coasts as well as in Great Lakes and Hawaiian waters, the agency says.

“The first-of-its-kind Atlantic Wind Connection is an encouraging sign of significant industry interest in developing the infrastructure to support offshore wind development,” says David Hayes, deputy secretary for the ocean bureau. “It is the type of project that will spur the innovation that will help us stand-up a clean energy economy to power communities up and down the east coast.”

Why would an internet search engine company be interested in building a complex under-water transmission system? For starters, this is not Google's first foray into the energy sphere or even the wind power component of it. To date, the company says that it has invested more than $915 million in the renewable energy sector, including investments in projects capable of generating 1,800 megawatts of power.

Google is a ravenous consumer of electricity and it must find a way to become more efficient and cleaner. By placing its bets on green energy, it is attempting to understand how it works and to help create economies of scale so that it can be cost-effectively generated. It operates hundreds of thousands of servers that use tons of electricity, which are often derived from coal. As the global leader in internet technologies, the web-based giant says that it can do better.

The basic building blocks are already in place. It has gained the experience constructing and designing large-scale data centers. The same lessons apply when it comes to expanding the use of renewable energy, it says, noting that the primary technologies are now available. They just need investment so that they can size up.

“Transmission is one of the key constraints to the wider adoption of clean energy, so this project was a natural fit with our corporate goal of investing in attractive renewable energy projects that can have dramatic impact,” says Rick Needham, director of green business operations at Google.

Commercializing off-shore wind will be daunting. But if it can be cost-effectively achieved and subsequently replicated, the projects would provide a refreshing new source of power to residents along the East Coast, and elsewhere.

EnergyBiz Insider is the Winner of the 2011 Online Column category awarded by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists.

Twitter: @Ken_Silverstein