Google buys 20 years worth of wind power

Google says it has purchased 114 megawatt of wind power for the next 20 years from NextEra Energy Resources’ Story County II facility in Story and Hardin counties in Iowa in the US.

According to Google, this is part its plan to voluntarily become carbon neutral in 2007, which consists of three main initiatives – building energy efficient data centres, building its own renewable energy systems such as its solar installation in Mountain View, CA, and finally, buying carbon offsets to balance out the rest of its carbon.

The deal with NextEra Energy Resources obviously falls in the last category, but it comes with a twist.

Instead of buying simple RECs (renewable energy credits) as offset, the Google deal actually includes the purchase of renewable energy. In other words, the company is buying the clean energy in order to gain the RECs, and not just the RECs themselves.

While commercial terms are not disclosed, Google should be paying a bit more than the standard price for RECs since it is also getting the electricity that comes with. Interestingly, Google can’t use that electricity, presumably because it is too far away from its facilities, hence inefficient to transmit, but instead will sell it on the power spot-market where it is being generated.

The move would allow Google to recoup its investment somewhat, perhaps even to make money since the deal is for a set rate over 20 years. If power prices go up, then Google can conceivably hedge that and even make money on the sale of the electricity – and it gets the RECs that go with it. In fact, Google has even set up a subsidiary called, Google Energy, to participate in this market, although profit might not be the greatest motivation.

Google says the investment will offer a huge benefit for the renewable energy industry because it offers financial stability to renewable energy firms, so they can invest in new projects.

“By contracting to purchase so much energy for so long, we’re giving the developer of the wind farm financial certainty to build additional clean energy projects. The inability of renewable energy developers to obtain financing has been a significant inhibitor to the expansion of renewable energy. We’ve been excited about this deal because taking 114 megawatts of wind power off the market for so long means producers have the incentive and means to build more renewable energy capacity for other customers,” Urs Hoelzle, senior vice president, Operations at Google, wrote on the Google blog.

Related posts:

1. Intel buys Wind River Systems for US$884m
2. HP sources solar and wind power for Irish, US facilities
3. Intel buys 1.3 billion kWh of renewable energy
4. Lineage Power buys PECO II
5. Google puts search CO2 into perspective

Tags: carbon offset, carbon reduction, clean energy, Climate change, Google, green energy, Green ICT, green telecom, RECs, Renewables, wind power

Category: Climate change, Green corporations, Green ICT, Renewables