Google is searching for answers. This time it is using its weight
to find energy-related solutions and specifically in the renewable
realm. To this end, it has invested nearly $39 million in two wind
farms that will generate 170 megawatts of electricity in North Dakota
that are owned by NextEra Energy, Inc. Google is not just a do-gooder. It's 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. The mere fact that the money is
coming from its for-profit arm and not its philanthropic division
indicates that it is serious. "We've been looking at investments in renewable energy projects,
like the one we just signed, that can accelerate the deployment of the
latest clean energy technology while providing attractive returns to
Google and more capital for developers to build additional projects,"
writes Rick Needham, Google's green business operations manager, in his
blog. In Google's case, it operates hundreds of thousands of servers
that use tons of electricity. Most of that energy comes from the
nearest power plants, which are often coal-fired. As the global leader
in internet technologies, the search engine says that it can do better.
Google's quest to go green got its formal start in 2007. That's
when the company announced its strategic aim to develop electricity
from renewable sources that would ultimately become cheaper than that
produced from coal. The enterprise has since spent millions on research
and development as well as related investments in green energy. It says
that it expects positive returns from those endeavors. 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. Meantime, Google.org, the company's non-profit division, has
stakes in eSolar, which specializes in solar thermal power and which
has shown the potential to produce utility-scale solar power. It also
has an investment in Makani Power, which is building high-altitude wind
energy technologies that try to better harness powerful breezes.
"If we meet this goal and large-scale renewable deployments are
cheaper than coal, the world will have the option to meet a substantial
portion of electricity needs from renewable sources and significantly
reduce carbon emissions," says Google Co-founder Larry Page. "We expect
this would be a good business for us as well." Betting Averages
The company has set a goal of becoming carbon neutral. Most
recently it joined several other high profile enterprises and
environmental organizations in urging global policy makers to formally
adopt such constraints. One of the key methods it has espoused is
giving consumers the tools they need to see their energy consumption in
real or near time. That would reduce energy usage by 15 percent, Google
says. It has therefore developed an online tool called PowerMeter that
can be provided through a local utility. The online search engine's
desire is to provide critical information to users. For example, it
says that if just half of all American citizens cut their energy use by
10 percent, carbon reductions would equate taking 8 million cars off
the road.
To do so, Google says that state public utility commissioners
must facilitate the development of intelligent utilities. That involves
the replacing of 40 million older meters with digitized ones that
permit utilities to communicate with their customers. Likewise, it
applauds federal lawmakers for allocating $4.5 billion to those new
technologies. At the same time, it is focused on reducing dependence on
coal-fired power, which supplies about 40 percent of all electric
generation on a global basis. The company, which attributes man-made
global warming to coal plants, says that it wants to help spark the
green revolution.
"We want to add something that moves these efforts toward even
cheaper technologies a bit more quickly," says Dr. Larry Brilliant,
executive director of Google.org. "Usual investment criteria may not
deliver the super low-cost, clean, renewable energy soon enough to
avoid the worst effects of climate change." To be sure, some critics say that Google is getting into areas
that are outside of its core competency. And that's not in the best
interest of its shareholders, who expect the company to build a better
search engine and not solve all the world's problems. By maximizing
profit, the logic is that it is creating jobs and prosperity that can
far exceed anything it might try as a side venture. Google, though, has a mission to uphold -- that of a 21st
Century enterprise focused on leveraging information. If arming
consumers with the knowledge as to how they are using energy will
encourage them to use less or demand cleaner resources, then it would
fall within the company fold.
By being good citizens, they are endearing themselves to their
own corporate families and to the communities where they serve. In
turn, they are validating their corporate images and adding value.
Others are also cognizant and notably GE that is using its
"eco-imagination" campaign while the world's largest institutional
investor, CalPERS, says that its socially-minded investments are
enhancing returns. Google is not betting the farm. It's just making investments in
key technologies that most recently include two wind farms. That's
capital that the company says will help facilitate the renewable energy
movement.
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