Google’s Best Energy Bet: Organizing Energy Usage


Google’s mission is to organize the world’s information — be it via search, email, online maps or mobile apps — but it could someday help you manage your daily energy consumption, too. At a speech at the Commonwealth Club in San Francisco last week, Google CEO Eric Schmidt said that as part of its recently announced collaboration with GE, the search engine giant is currently looking at designing tools to help consumers understand their energy consumption. Google has also been actively looking at utilities’ smart meter projects, he said, and at using its strong connection with consumers to play a role in consumer energy management.

In fact, out of all of Google’s grand energy schemes, among them its $4.4 trillion energy proposal, its $45 million investment into energy-related startups and its plug-in vehicle project, energy data management could be one of the only places where Google plans to generate revenues. Schmidt said during his speech that there is an internal debate going on at the company as to how much of its energy initiatives will turn into real revenues, but that, “[T]o the degree that we can be in the information businesses or communications businesses about energy and its impact on the world, we are clearly going to be there.”

Helping consumers, even utilities, manage energy data is a perfect fit for Google. Power grids throughout the world will need to undergo a dramatic buildout and restructuring to accommodate both an increased demand for energy and a switch to renewable power. By 2050, the world’s population is forecast to balloon to 9 billion people from 6.5 billion — all while the world is trying to reduce greenhouse gas emissions by some 80 percent. The power grid in its current form won’t be able to support the loads — inefficient and unintelligent, it has yet to benefit from the technologies of the information age. Meanwhile, at the edges of the grid, consumers know very little about their energy use; monthly electricity bills have an appalling lack of transparency and options compared to industries like cell phones.

But change is on its way. Utilities are starting to install smart meters in homes to provide two-way digital communication. According to data from the Cleantech Group, venture capitalists invested a record $2202 million into smart grid startups in the third quarter of 2008, including companies like GridPoint, Eka Systems, BPL Global and Trilliant. Startups like Greenbox, PowerMand, and EnergyHub are building energy dashboards and wireless home network products to help consumers manage energy use. Google could easily acquire its way into this market, too. (See our report on 25 up-and-coming Smart Energy Home startups) As Cees Links, the CEO of GreenPeak, a startup that builds wireless energy sensor networks, put it, there’s a simple but revolutionary change going on, that of “a growing awareness of energy being a precious resource.”

That said, there probably isn’t a company that has changed consumer behavior online more than Google. It has not only shaped how consumers access information — from news to images to direction — some have argued that Google is even changing the way we think and process information (See the Atlantic’s “Is Google Making Us Stupid?”). The company has spent years organizing personal consumer information through web searches, advertising, and email, information that could come in very handy when it comes to building smart tools to offer energy-saving services.

So Google is wise to be looking into online tools, or even a wireless home networking product, that could help consumers change their energy consumption behavior. They’re clearly headed in that direction: “It seems obvious to me that if you give [energy] information to end users they behave smartly,” Schmidt said in his speech. “So we are working on that.” It could ultimately be the most important contribution Google makes to fighting climate change. As Stanford’s Precourt Institute for Energy Efficiency notes, advanced technology deployments will take several decades and a lot of capital. Simple tools that can affect the behavior of the average consumer’s energy usage will be more cost-effective and can be implemented now. For all its do-gooder intentions and philanthropic aims, how can Google resist such an easy target?

Originally posted here on GigaOM.


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