Google’s green power play
Google the jolly green giant?
In a move to shake up the nascent renewable energy industry, Google announced Tuesday it will spend hundreds of millions of dollars developing new solar and wind technologies while investing in green tech startups.
The goal, according to Google founders Sergey Brin and Larry Page: Send the fossil fuel industry to the coal bin of history by making renewable energy cheaper than coal, a main culprit in the global warming crisis.“
Assuming we can develop this, we want to deploy it as broadly as possible,” said Brin during a conference call. “Which means we’ll license the technology or put it in place ourselves.” Of particular interest is spreading renewable energy technology to rapidly industrializing but coal-dependent countries like China and India.
Dubbed RE<C (as in Renewable Energy Cheaper than Coal), the Google initiative will involve hiring green energy engineers and technologists for an in-house R&D program that will focus on developing breakthroughs in large-scale solar power plants. At the same time, Google’s (GOOG) philanthropic arm, Google.org, will invest in green energy companies. Within a few years Google wants to be able to produce a gigawatt of clean energy — enough to power a city the size of San Francisco — at a price that will undercut cheap electricity from coal-fired plants.
For solar energy companies, the double-headed approach raises the prospect of both a potential brain-drain to Google and the possibility of a payday if the search giant goes on a green tech shopping spree. Page said Google routinely acquires “dozens of companies” and would apply that strategy to the renewable energy initiative where appropriate.
John O’Donnell, executive vice president of Silicon Valley solar energy startup Ausra, said he welcomes Google’s bid to become a green energy player.”I think folks who have or are developing technologies that can deliver RE<C are going to get some speedup in moving to market,” he told Green Wombat. “That’s good news for the sector and for the planet.”
Ausra, backed by venture capital heavyweights Vinod Khosla and Kleiner Perkins Caufield & Byers, builds large-scale solar power plants and recently signed a long-term deal with California utility PG&E (PG&E).
“We’re at a more mainstream engineer/build stage, and don’t expect hiring problems,” O’Donnell added. “Google may encourage more smart folks to seek careers in clean energy.”
Given that a solar power plant can cost anywhere between half a billion and a billion dollars or more, it appears Google will concentrate on perfecting solar technology rather than get into the utility business. “In terms of building power plants, hundreds of millions of dollars is really not a large sum, so I hope they spend the money in a highly leveraged way to get the most out of it,” says John Woolard, CEO of solar power plant startup BrightSource Energy, which is negotiating with utilities to supply 1.5 gigawatts of solar electricity.
“We are very active in the Southwest, and would look forward to working with a group like Google on building out power plants,” he adds. “I never would have predicted that Google would emerge as a provocative leader in large scale solar, but I am very excited about thevisibility it brings to an area of technology that we know has real economic potential.”
Google already is working with two renewable energy startups. One is eSolar, a Pasadena, Calif., developer of utility-scale solar thermal power plants whose chairman is serial tech entrepreneur Bill Gross. The other is Makani Power, a stealth Bay Area startup that is developing what it calls “high-altitude wind energy extraction technologies aimed at the most powerful wind resources.”Page and Brin declined to say if Google has invested in those companies.
PG&E spokeswoman Jennifer Zerwer said RE<C is “clearly a sign of the growing awareness of and response to climate change — and that is a positive trend, especially for those concerned about climate change, as we are. While we did not work directly with Google on this announcement, we team with them on their energy efficiency and renewable efforts.”
Like other California utilities, such as Southern California Edison (EIX) and San Diego Gas & Electric (SRE), PG&E is under the gun to obtain 20 percent of its electricity from renewable sources by 2010 and 33 percent by 2020.
The move into green energy is Google’s biggest departure so far from its core search and advertising business. But Page noted it is not a change of mission for Google.org, which currently is managing initiatives to promote plug-in hybrid cars.
Brin and Page took pains to stress that RE<C makes good business sense, with the potential to profit from Google’s stake in green energy companies or technology the company develops. Still, acknowledged Brin, “We’re not going for huge margins. We want to deploy this fast.”
“This has the ability to change the world,” he added.
Wind has already achieved cost parity, and that’s with coal’s outrageous subsidies. In fact, then, my understanding is that it’s already cheaper.
While I’m glad that solar will get Google’s attention, I think that efforts like the Defense Department’s delays of wind projects, and the difficulty of passing tax credits for wind need to be publicized. Those clearly are fossil industry maneuvers.
Renewable energy is an amazing investment! Of course, its unlikely any smaller business can afford such technologies. However, a compadre silicon valley company is offering a free conference in january called EnergyCamp and its geared toward helping the average Joe help his business reduce their carbon footprint. Check out http://www.openeco.org/energycamp for more info! See you there
Wow–there may be hope for the future, after all! This is the best news in years; I hope it works out exactly as they plan and put fossil fuels–especially coal–in the bin for good.
this is the kind of publicity renewable energy has needed for a long time. Google deserves a gigantic hug. Maybe now it is not just optimistic to hope for a global shift in energy sources…
A great and visionary move. But the other side of the equation also needs addressing - more efficient appliances, industries and lowering our usage.
Both are correct:
Obtain 20 percent of its electricity from renewable sources by 2010 and 33 percent by 2020
Pending Energy Legislation
The solar industry is at a crossroads. Over the last few years, the amount of solar electricity generating capacity has grown exponentially in the United States. This was due mainly to the Energy Bill of 2005, which provided a 30% Investment Tax Credit for commercial solar installations and a $2,000 federal tax credit for residential installations. These tax incentives coupled with generous state rebate programs, most notably in California and New Jersey, led to the installation of over 100 Megawatts of photovoltaic solar capacity over the last 2 years. Government incentives in Germany, Spain, Portugal, France, Italy and Ontario have been even more successful, and consequently, the companies that manufacture solar panels have seen their share prices soar. Investor interest in the renewable energy sector has driven the market capitalization of companies such as Sunpower (SPWR), First Solar (FSLR) and Suntech (STP) into the multi-billions. However, the United States’ Investment Tax Credit for Solar is set to expire at the end of 2008 and unless it is extended with the current Energy Bill, the U.S. solar market will grind to a halt.
1The House intends to vote on the energy bill on December 5. As a result of action taken by solar proponents over the past few weeks, the bill will include a tax title that includes the Solar ITC, as well as a Renewable Energy Standard (RES) title, a Renewable Fuels Standard (RFS) title and a car & truck fuel standard (CAFE) title. The tax title is what the Solar Energy Industries Association has been expecting - $17 to $18 billion in incentives, fully offset.
The House vote is expected to occur even if there is doubt whether the Senate has 60 votes to pass a similar package. If the Senate cannot garner 60 votes on the entire package, the expectation is that they will pass and send back whatever titles they can get 60 votes for. Both Democrats and Republicans are feeling pressure to act on energy legislation given the likelihood of oil topping $100 a barrel. The industry should be self -sufficient once this legislation sunsets.
What the Solar Industry Needs:
· Eight-year extension of the 30% business ITC under Section 48
· Six-year extension of the 30% residential ITC under Section 25D
· Elimination of the existing $2,000 limit on the 30% residential solar ITC under Section 25D
· Permit corporate and individual taxpayers to claim the ITC against the Alternative Minimum Tax (AMT)
· Elimination of the public utility exception to the ITC.
There are many compelling reasons to enact this legislation. Solar is a clean, renewable source of energy. There are no greenhouse gases produced as silicon converts photons from the sun into electric current. Extending the tax credits will spur a tremendous amount of job creation in the solar industry. It will also promote energy independence, provide lower and predictable energy costs and establish a sustainable way for the country to continue to grow. – John Moran johnflanaganmoran@gmail.com
1. Cited: http://www.Solarbuzz.com
Washington, DC, USA: Politicians React to Solar Industry Lobbying; More Needed
Once again Google is ahead of it’s time. Renewable Energy will be the biggest business of the 21st century and a transformative technology for mankind.
obtain 20 percent of its electricity from renewable sources by 2020 and 33 percent by 2020.
Which is correct?
It’s a great idea for these companies that have lots of cash for them to invest in some worthwhile longer term goals. It remains to be seen, however, if the large cash infusions that happen through this will result in the technology being developed that we need.
Solar flower arrays soak up sunlight when the sun shines brightly in the desert but rolls up into a protective pole when dust storms kick up.
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Silicon Valley these days is all about making the green by being green. A senior editor for Fortune in San Francisco and a veteran environmental and technology journalist, Todd Woody writes about green tech as climate change drives new business models, technologies and opportunities. Before joining Fortune, Todd was an editor at Business 2.0, and the business editor of the San Jose Mercury News. Previous posts included senior writer and senior editor at The Industry Standard magazine, freelance writer for Wired magazine in Australia and a senior writer and environmental reporter at The Recorder, a San Francisco legal daily. He's one of the few people on earth who have seen the rare northern hairy-nosed wombat in the wild.
started a blog on this topic:
http://heliostat.google.com