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Summary:

Here’s the real reason that I think Google entered into a contract earlier this month to buy clean power from a wind farm in Iowa: data center power.

Here’s the real reason that I think Google entered into a contract earlier this month to buy clean power from a wind farm in Iowa: data centers.

Since the beginning of this year Google has maintained that its plans for Google Energy — a subsidiary that the Federal Energy Regulatory Commission (FERC) approved in February to be able to buy and sell energy on the whole sale markets — largely has to do with offsetting Google’s carbon footprint. It sounds reasonable. Google has plans to go carbon neutral.

But in other statements Google has made to us, particularly in this video interview we did with Google’s Green Energy Czar Bill Weihl at Green:Net 2010 in May, it becomes clear that Google Energy is also ultimately about being able to procure energy, specifically clean energy, to power its data centers. Economically that’s a smarter explanation, as according to estimates from a report from MIT and Carnegie Mellon, Google spends about $38 million annually on electricity for data centers.

Google’s Weihl told us in an interview (embedded below), and which I go into in more detail in this article for GigaOM Pro (subscription required), that one reason Google obtained the ability to buy and sell clean power is so Google could enter into a power purchase agreement contract with, say, a wind developer. Google would agree to buy the wind power before the wind farm was built, helping the developer get a better interest rate for the financing of the plant.

But since Google’s data center facilities already have their own power sources, Google would then sell the power from the wind farm on the whole sale market until one of its data center power contracts expired and Google could use the wind power more directly, like negotiating with the local utility to resell it to them.

So, as Weihl put it, Google isn’t just “wasting,” it. Yep, wasting it, like using it to offset Google’s carbon footprint. To read my entire story, check it out on GigaOM Pro (subscription required).

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  3. free Cardsharing Wednesday, July 28, 2010

    hmmm :)

  4. Casey Harrell, Greenpeace International Wednesday, July 28, 2010

    Hi Katie, really interesting story and analysis (and extended in GigaOm Pro).

    Another reason Google or any company with large (and expanding) electricity bills might be looking at this or a similar strategy is the expected financial risk that will come with an effective price on carbon/GHGs. Being powered by high carbon sources like coal will be a risk, but also a relative opportunity for forward-looking companies to link their electricity to greener, lower cost sources (as you mention).

    While I’m sure that Bill and others hear from many potential wind (or other renewable) developers when Google is looking at siting new data center projects, it’s difficult to assess what impact this is having on Google’s overall environmental footprint. The collective knowledge outside of the company is fairly scant on Google’s data center siting, and company does not take the fairly commonplace step of disclosing it’s own emissions footprint, via the Carbon Disclosure Project (like many others in the IT industry do) or other mechanisms.

    For a company that is indeed leading the IT industry in many aspects of green tech (especially in their <A HREF=advocacy work), this is a specific place where Google can <A HREF=improve. This type of sunshine from the company would be able to confirm whether or not your thesis — that Google is actively attempting to power is data centers with clean energy — is indeed correct.

  5. Katie, you’re doing a wonderful job covering genuinely important movements in the green tech industry. Been a frequenter for almost 2 years and this site beats the pants off others; particularly the largely irrelevant inhabitat. Keep up the great work!

  6. terrencemurray Wednesday, July 28, 2010

    Yes, I agree the Data Centers have always formed the backbone of Google’s energy strategy. Although, I don’t think until last week’s announcement, the company actively communicated on its quest to “green” its energy-hungry data centers.

  7. “Omg! That windmill is spilling air all over the land!” certainly sounds better than, “Omg! That oilrig is spilling oil all over the ocean!”
    Revolution E-Cigarette

  8. It was pleasure watching that video. Very interesting Q&A section.

  9. Juan Pablo Gomez Friday, July 30, 2010

    I believe that if they were really interested in energy for their datacenters they should look for a solution of combined heat (chill) and power. Half of the energy used in a datacenter generally is used for cooling.A gas engine or gas turbine + HRSG + absortion chillers, seems much more efficient. The quest is not just how we generate and distribute the energy, is more about how we use it.

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