GE sells stakes in huge Oregon wind farm

A man enters the General Electric building at 1250 Avenue of the Americas, also known as 30 Rockefeller Plaza in New York, January 22, 2010.

Credit: Reuters/Brendan McDermid

NEW YORK | Mon Apr 18, 2011 4:25pm EDT

NEW YORK (Reuters) - Google Inc and two Japanese partners will pay General Electric Co about $500 million for a majority equity stake in the world's largest wind farm under construction in Oregon, the partners said on Monday.

The $2 billion Shepherds Flat project, near Arlington, Oregon, is due to be completed next year. It will stretch over 30 square miles of north-central Oregon and generate enough energy for 235,000 U.S. homes. The site's developer is Caithness Energy.

GE said the stake sale was part of its strategy of drawing private investment to the U.S. wind market. GE and Google are partnering with the U.S. unit of Japan's Sumitomo Corp and a unit of Itochu Corp.

Google, Itochu and Sumitomo will together own 56 percent of the total project, reducing GE's equity stake to 34 percent. Caithness will own the balance, GE Energy Financial Services spokesman Andy Katell said.

Itochu and Sumimoto will each win more than 20 percent stakes, Japan's Nihon Keizai Shimbun newspaper reported.

The Shepherds Flat site will eventually use GE 338 turbines and will provide electricity to Southern California Edison, a unit of Edison International.

Sumitomo jointly owns a Texas wind farm with GE and owns wind farms in Japan and China. Itochu partnered with GE on an Oklahoma wind farm.

Measured by its 845-megawatts of capacity, the Oregon site is the world's largest wind farm, Google and GE said.

But one proposed project slated for completion by 2015 is envisioned as housing 1,550 megawatts. That project, headed by Terra-Gen Power LLC, broke ground in July 2010 and will potentially dwarf current leaders E.ON Climate and Renewables' 782 MW facility in Roscoe, Texas, and NextEra Energy's 736 MW Texas complex.

GOOGLE'S STAKE

Google said its investment totaled about $100 million, bringing its total investments in the clean energy sector to more $350 million. Earlier this month, it invested in a solar project near Berlin and a solar electric generating system in California's Mojave desert.

"We're excited about helping deliver clean energy to the grid and we hope this latest investment encourages other companies to think about ways they can help accelerate the deployment of more renewable energy," Google's Director of Green Business Operations, Rick Needham, wrote in a company blog.

Google's spending on costly projects seemingly unrelated to its core search business is raising eyebrows on Wall Street.

Last week, that concern turned into consternation after the world's largest search engine revealed a 54-percent surge in first-quarter operating expenses, blamed on pay raises, marketing and other efforts to attract and retain talent as it gears up to battle Facebook.

Wall Street is now worried that new CEO Larry Page will not try to aggressively rein in spending as he pursues expansion into his cherished areas of social networking, mobile, search and other markets.

Some of the company's projects have included self-driving cars, but Google has of late been a heavy investor in renewable energy projects. Most recently, it threw its financial clout behind an ambitious $5 billion proposed electric transmission line intended to jumpstart wind investment along the east coast.

Google shares closed Monday down 0.8 percent on Nasdaq. GE fell 0.4 percent in a down market.

(Reporting by Nick Zieminski, editing by Bernard Orr)

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