Google's 'green' energy plan: Build, learn, expand

A ravenous consumer of electricity, Google knows it must find a way to become more efficient and cleaner. Hundreds of thousands of its servers are partially dependent on fossil-fueled power. So just as it gained experience constructing and designing large-scale data centers over the years, the global leader in Internet technologies is now applying the same lessons to expand its use of renewable energy.

This past week, Google announced its seventh and biggest “green” investment yet: the purchase of renewable energy certificates from MidAmerican Energy that equate to 407 megawatts of electricity, which increases the amount of renewable energy that it essentially finances by more than 60 percent. Google has also invested $1 billion in hard assets, owning a piece of actual renewable projects. 

Other corporations are even further along, including chipmaker Intel Corp., which already meets all of its energy needs with renewable power and is No. 1 in renewable power, according to a list released this past week by the US Environmental Protection Agency. It is followed by Kohl’s Department Stores, Microsoft Corp., and Whole Foods, with Google at No. 5. Many companies are being proactive, reasoning that it is healthy for both the environment and business.

“At Google, we pursue a variety of approaches to power our operations with renewable energy,” said Gary Demasi, Google’s director of global infrastructure, in a press release. “One great way to do this is by working with our utility partners like MidAmerican Energy, and we hope this agreement will inspire all of our utilities to work with us in finding ways to increase the supply of clean power.”

The renewable energy credits Google purchased are key for an energy provider, because it means that the utility has a guarantee that if it generates wind or solar power, it will be able to sell it. Nevertheless, utilities’ investments in renewable energy are not risk-free.

Utilities are understandably nervous about putting capital into emerging technologies that may not have an immediate payback and that may not adequately be recovered through the rate base. In most cases, regulators are pushing those power companies to add green fuels to their mix.

“These types of voluntary purchases of renewables by corporations, along with policy drivers such as state renewable energy standards and federal tax credits, are driving the development of renewables,” says Lori Bird, senior analyst for the National Renewable Energy Lab in Golden, Colo., in an interview. “Reductions in the cost of renewables are also making these investments more economic.”

More than 860 utilities offer green power programs to their customers, the lab says, giving more than half of the electricity customers nationwide the option to buy renewable energy from a provider. 

Eco-minded businesses are snatching up the credits. Whole Foods, for example, says that it was the first major retailer to offset 100 percent of its electricity use by buying wind energy certificates. Meantime, software manufacturer SAP says that it will do the same while Microsoft says that it gets 80 percent of its electricity from renewables.

"As Google and other industry giants invest in renewables, they're lighting the way for sustainable business on a larger scale,” says Shawn Mills, president of Green House Data, a data-center services company focused on sustainability, in an interview.

He points to Apple, which has taken heat for its go-slow approach. The computer giant powers its data centers with renewables at the 2 percent level, which still eliminates hundreds of thousands of metric tons of carbon releases annually.

Renewable energy markets are advancing – a confluence of mandatory government actions taken to create certainty along with voluntary steps by both utilities and their customers. It’s a tricky balance but the progress in renewable energy is palpable.