Stay on Top of Emerging Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Could Google (s GOOG) one day sell you electricity? This week E&E News and CNET are reporting that the search engine giant has created a subsidiary called “Google Energy,” which is looking to buy and sell electricity on federally regulated wholesale markets. Google has asked the Federal Energy Regulatory Commission (FERC) — the group that oversees the U.S. electrical network — for permission to do so.
Google’s Niki Fenwick told us (and is quoted in the other media reports) that Google has no plans to become an energy seller but that the creation of Google Energy is an attempt to proactively address hurdles it could face in its plans to go carbon neutral. Given the legal permission to act as a utility — basically buying and selling clean energy (it owns a large rooftop solar project at its headquarters) — Google could help offset its carbon emissions that result from its large power needs.
While creating Google Energy and asking permission to buy and sell electricity is definitely an unusual move for an Internet company, it’s not entirely unheard of for a large company to form a wholesale power firm. Nathaniel Bullard, an analyst at Bloomberg New Energy Finance, pointed out to me that Wal-Mart created Texas Retail Energy, which allows it to procure its own power and get the lowest-cost electricity for their warehouses and retail stores.
When news about Wal-Mart’s energy firm came out in 2007 there was a lot of speculation that Wal-Mart would get into the electricity selling business, and Wal-Mart said it hadn’t fully ruled that out for the long term.
Wal-Mart formed the power firm to find the lowest electricity, while Google says the move is more to address clean energy and carbon emissions. But perhaps the real aim of Google Energy is, like Wal-Mart, to find the lowest cost electricity period. Google uses a massive amount of energy to power its servers and has been looking at a variety of ways to lower their energy bills through energy conservation measures. Just having more control over the supply of energy could help cut the monthly energy bill. Google’s Fenwik tells me that Google wants to buy the most affordable renewable energy that it can.
Google’s Fenwick told CNET that for Google Energy, “We don’t have any concrete plans.” I think that answer is probably not a way to dodge the issue — Google has a lot of aggressive and far-reaching projects that they don’t necessarily think through fully before starting to implement them.
[I]f you don’t say five years later, “We never should have done that” about a significant percentage of it [company projects], then you’re being way too conservative. So the stuff we’re doing under the Google.org umbrella on alternative energy, some of it doesn’t connect very closely to Google’s core business, some of it does, and that’s O.K.
But then again, companies like Google and Apple (s AAPL) deny for years some of their bigger and extreme projects like building mobile phones. So while Google might just be experimenting for now, it’s probably safe to say that nothing is off the table for Google Energy.