For a long time now, the company that built its business on search and advertising has been rooting around in the electricity and energy arena. In February 2010, Google was granted an order by the US government allowing it to buy and sell energy at market rates.
At the time, the line from Google was that it was not interested in becoming an energy supplier, but rather in buying clean, green energy and using the green credits it would get to help offset other carbon emissions. Now the story is becoming more interesting.
Google will invest US$100-million in what will be the world’s largest wind farm, in Oregon. With two Japanese partners the total investment will be US$500-million, amounting to a majority stake. Google has invested US$350-million thus far in clean energy, including a stake in a solar energy plant in Germany. The company has invested in other solar projects in the US, including some that directly provide power to some of its businesses.
The buying of the means of energy production looks to be just one part of Google’s plans. It also has a long standing alliance with General Electric (GE) in a vision to build a “smart grid”. Google hopes to use its skills in handling overwhelmingly large datasets, and writing algorithms to analyse them, to improve the way we consume energy.
A Smart Grid is essentially a way of distributing electricity with the help of digital technology. Instead of consumers just being hooked up to a normal grid, and ‘turning on the taps’ whenever they need to, the relationship is more two-way. Information about available energy within the grid is passed to the consumer by the grid, and information about usage habits, and current consumption levels etc. is passed to the grid by the consumer. In this way the amounts of energy that are sent to different parts of a grid, as well as to individual consumers, can become more efficient.
Ultimately it is all about information, and using that information to create economies. Google already has a viable product in this field – the Google PowerMeter. For consumers in some select countries, who have a ‘smart meter’ in their homes, Google provides a free, added value service. Google PowerMeter allows you to access data about your energy consumption online from anywhere in the world. It gives insights as to the baseline power that is being consumed at all times (from appliances on standby etc.) and can give a visual representation of electricity usage over an adjustable time scale.
The application can also help people budget and save money, by attaching costs to the amounts of electricity being consumed, and projecting trends based on gathered data.
All this points to the fact that Google sees a great investment opportunity for itself in the future of clean, efficient energy. It is likely an investment it sees as both short and long term. It is already clear that many more consumers and especially businesses are shifting some of their energy consumption over to cleaner sources, to take advantage of the carbon offsetting opportunities. The production of clean energy is one thing, but clearly Google sees its own potential in the design of systems to improve efficiencies and economies in the energy industry as well.
In the long term, Google’s decision makers may well be betting on the demise of fossil fuels as a viable solution to our energy requirements, and a pressing need for sustainable forms of energy like solar and wind farms. In a couple of decades we may have Google dominating our online experience, our television access, and also the supply of our power. Any guesses on what could be next?