Google Invests $168 million in Solar Energy

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Yesterday, Google announced a $168 million dollar investment in the Brightsource Ivanpah project, a 450 foot tall solar power tower located in California’s Mojave desert. The investment is Google’s largest single investment to date, and brings the company’s total investment in clean energy technology to a cool quarter of a billion dollars. It is the latest expenditure in Google’s RE program, which seeks to develop renewable energy sources that cost less than coal. In 2008, the company announced a commitment to clean energy by the year 2030.

Google posted an announcement regarding the Ivanpah investment on its company blog:

“We need smart capital to transform our energy sector and build a clean energy future. This is our largest investment to date, and we’ve now invested over $250 million in the clean energy sector. We’re excited about Ivanpah because our investment will help deploy a compelling solar energy technology that provides reliable clean energy, with the potential to significantly reduce costs on future projects.”

The Ivanpah solar tower, formally known as the Ivanpah Solar Electric Generating System, is the largest solar thermal power facility currently under construction. BrightSource projects that the site will create 1000 jobs at the peak of construction, as well as 86 full-time jobs after construction has been completed. The economic impact of the Ivanpah facility, according to BrightSource, could exceed $3 billion.

Google’s investment likely has a few motivations. First, the energy needs of the company are extensive. Although Google is coy about size and number of servers, a recent Gmail outage revealed that the cloud email service keeps “multiple copies of your data, in multiple data centers,” as well as an offline backup. That infrastructure is just the tip of the iceberg for Google, who makes the large majority of its money on search and ad delivery. When services (and costs) move to the Cloud, the Cloud companies foot the bill.

“Right now, we can’t buy affordable, utility-scale, renewable energy in our markets. We want to buy the highest quality, most affordable renewable energy wherever we can and use the green credits,” Google representative Niki Fenwick told CNET in February of last year. In that same month, Google Energy, a subsidiary of Google, received the go ahead from the Federal Energy Regulatory Commission to buy and sell energy at market rates, as if it were a utility company. By effectively managing its energy costs, Google can save a bundle on powering its data centers. Along those same lines, solar facilities like Ivanpah have the potential to lower costs for Google, effectively returning on the company’s investment.

The FERC order from last year reveals a potential secondary (and more intriguing) purpose for the Ivanpah investment, however. The FERC statement gives more insight into Google Energy’s business model than the company itself might openly admit: “Google Energy states that it intends to act as a power marketer, purchasing electricity and reselling it to wholesale customers.”

At the time, the FERC report also noted, “Google Energy states that none of Google Energy, Google, nor any affiliate own or control any wholesale electric generation facilities.” Looks like that might be changing.

“We don’t have any concrete plans. We want the ability to buy and sell electricity in case it becomes part of our portfolio,” Fenwick told CNET last year. The Ivanpah investment, along with other recent investments by Google into clean energy, seem to indicate that the company is at least considering a move into the energy space.

Although the company hasn’t made any statements about the possibility of Google Energy lighting your home or powering your washing machine, the pieces are being put in place for both the development and sale of energy. The Ivanpah facility is scheduled for completion in 2013. By then, the Google Energy picture may be much clearer.

Previous clean energy investments by Google include eSolar Inc, which builds Concentrating Solar Power (CSP) plants, as well as AltaRock Energy and Potter Drilling, which use various techniques to optimize and develop geothermal energy sources. Google has also made significant investments in wind technology, including $38.8 million invested in two North Dakota wind farms.

Is Google Becoming A Utility Company? – Chris Barth – Invested Interest – Forbes.

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