Google pledges millions to renewable energy

CNET NEWS.COM: Search giant Google on Tuesday pledged to splash out hundreds of millions of dollars to make renewable energy cheaper than coal, a unusually direct effort from a non-energy sector company that will hopefully encourage other companies to follow their lead.

The plan, dubbed RE<C (that's shorthand for "renewable energy less than coal"), calls for Google to invest in companies developing clean-energy technologies and for Google itself to next year invest tens of millions in research and development in renewable energy.

The green technologies that Google create will likely be used by Google themselves, just as well considering their data centers are voracious consumers of electricity. The company envisions either selling electricity from renewable sources or licensing technology on terms that would promote widespread takeup, say company founders Larry Page and Sergey Brin.

Its primary goal is to produce 1 gigawatt of electricity from renewable sources -- which in real terms is enough to power the city of San Francisco -- faster than the current pace of green-technology development.

"The main crux of this is that we believe that you can do it cheaper than coal...and we want to make it happen now," said Page, Google's president of products. "Most people who are doing this now are trying to do it less expensive than people before, but they are not trying for that goal which will have a significant effect on the world."

Investments in other companies will be funded by Google's philanthropic arm, Google.org, which has about $2 billion worth of Google stock tucked away.

In particular, Google will be investing in solar-thermal technology, wind power, and geothermal systems. Its target is to undercut the price of coal power generation, which can be as low as 2.5 cents per kilowatt-hour, said Bill Weihl, Google's green-energy czar.

Google said it's already working with eSolar, a solar-thermal company involved in building systems that generate electricity from heat. It's also invested in Makani Power, which is developing electricity generation by harnessing wind at high altitudes.

To help it get going Google will be hiring eggheads in the energy field. It expects to hire 20 to 30 such experts into its clean-energy division in the next year. More substantial investments will come as energy projects come online, Weihl said.

So what do the financial analysts make of Google's plans? Paul Clegg, a senior equity analyst who follows clean tech at Jefferies says that although an ambitious plan, Google's impact on the clean-tech market segment in the near term is likely to be more psychological than financial.

"Tens of millions of dollars is not a small number, obviously, but you're spreading that over things that a lot of other companies are attacking on an individual basis with more money going at it," Clegg said. However, Google's initiative is significant in that it could indicate how corporations will start addressing their energy needs and climate change going forward, he said. 

As a large consumer, Google can benefit from cheaper sources of electricity and technologies it successfully develops could generate revenue, founder Brin said. In addition, those technologies could potentially bring cheaper sources of electricity to areas of the world that don't have it.

"For economic development to be possible in these areas and for new industries to be spurred along, we want to develop cheap alternatives that are widely available," he added. "This isn't just about solving a problem. It also creates a gigantic opportunity."

Google estimates that about 40 percent of power worldwide comes from burning coal, one of the most polluting fossil fuels. Some renewable forms of power promise to approach the cost of fossil fuel production, notably solar thermal and wind, which both benefit from government incentives.

In an FAQ document, Google said it will pursue "enhanced geothermal technology that taps into heat underground to generate usable energy. It said this approach differs from traditional geothermal technology because it can be used nearly anywhere, rather than only in locations with specific geological features.

Google's intention to invest directly in power generation technologies is unusual for a business outside the energy sector. Companies with commitments to reduce greenhouse gas emissions typically invest in on-site renewable energy or purchase carbon offsets that represent investments in clean-energy projects.

Wal-Mart, for example, has a high-profile program to make its stores more energy efficient by using the latest technologies, including solar photovoltaics. It has also done reviews with suppliers to reduce waste and packaging in its supply chain and stores.

The company has hundreds of people dedicated to making its computing infrastructure more energy efficient, and it founded the Climate Savers Computing Initiative to make computer components more energy efficient. It has also launched programs to lower greenhouse gas emissions from its own operations, including a 1.6-megawatt solar array and a facility to charge plug-in hybrid vehicles and in September, set up a $10 million program to invest in companies developing clean transportation technologies. . It expects to meet its goal of being carbon neutral this year, executives said.

Despite these efforts, the company's buildings and data centers continue to consume electricity from coal-fired power plants. "We feel hypocritical as a company so we want to make the investments so that alternatives are available down the road," Page said.

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