Google, the Power Company?

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As a renewable energy junky, I was both shocked and pleased to see Google (Nasdaq: GOOG  ) was getting into the power transmission business. Google seems to be entering every part of our lives these days with smartphones, TV, and now power. But maybe renewables should just be considered a division of Google at this point with investments in BrightSource Energy and wind farms in North Dakota. Maybe Google is the next big thing in power?

The project announced this week is a 350-mile long transmission line underwater, along the East Cost, stretching from Virginia to New Jersey that could cost a whopping $5 billion. The line is designed to be the backbone for offshore wind farms but doesn't involve Google building any turbines itself, yet. If completed, an estimated 1.9 million homes could be powered by the line.

This could be the break wind manufacturers need to get offshore wind going in the United States. A project was recently approved off the coast of Massachusetts, but it hasn't exactly been easy to get projects off the ground. Wind turbine manufacturers GE (NYSE: GE  ) , Siemens (NYSE: SI  ) , and Vestas Wind Systems have big hopes for offshore wind turbines as transmission lines begin to limit the wind business on land, so Google's proposal should be welcome.

Once the transmission line is built, independent power generators moving into alternative energy can move in. NRG Energy (NYSE: NRG  ) and AES Corp. (NYSE: AES  ) seem like a natural fit with growing wind portfolios and a wide geographic reach. With transmission lines in place, they will be able to build offshore wind farms at 17%-20% lower cost than if utilities had to run their own transmission lines.

This is a huge step in the right direction for wind turbine manufacturers looking to find opportunities offshore. These turbines enjoy winds that blow 40% more than on dry land, generating extra power with less intermittency. This gives producers a solid return on investment (despite higher costs) and theoretically, more money in investor's pockets.

I'm sure this isn't the last power play we've seen from the newest, biggest name in power, Google.

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Fool contributor Travis Hoium is long on shares of Vestas Wind Systems. You can follow Travis on Twitter @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw. Google is a Motley Fool Inside Value selection, a Motley Fool Rule Breakers pick, and The Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days.

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