Google the jolly green giant?
In a move to shake up the nascent renewable energy industry, Google
announced Tuesday it will spend hundreds of millions of dollars
developing new solar and wind technologies while investing in green
The goal, according to Google founders Sergey Brin and Larry Page:
Send the fossil fuel industry to the coal bin of history by making
renewable energy cheaper than coal, a main culprit in the global
“Assuming we can develop this, we want to deploy it as broadly as
possible," said Brin during a conference call. “Which means we’ll
license the technology or put it in place ourselves.” Of particular
interest is spreading renewable energy technology to rapidly
industrializing but coal-dependent countries like China and India.
Dubbed RE<C (as in Renewable Energy Cheaper than Coal), the
Google initiative will involve hiring green energy engineers and
technologists for an in-house R&D program that will focus on
developing breakthroughs in large-scale solar power plants. At the same
time, Google’s (GOOG) philanthropic arm, Google.org, will invest in
green energy companies. Within a few years Google wants to be able to
produce a gigawatt of clean energy — enough to power a city the size
of San Francisco — at a price that will undercut cheap electricity
from coal-fired plants.
For solar energy companies, the double-headed approach raises the
prospect of both a potential brain-drain to Google and the possibility
of a payday if the search giant goes on a green tech shopping spree.
Page said Google routinely acquires "dozens of companies" and would
apply that strategy to the renewable energy initiative where
John O’Donnell, executive vice president of Silicon Valley solar
energy startup Ausra, said he welcomes Google’s bid to become a green
"I think folks who have or are developing technologies that can
deliver RE<C are going to get some speedup in moving to market," he
told Green Wombat. "That’s good news for the sector and for the planet."
Ausra, backed by venture capital heavyweights Vinod Khosla and
Kleiner Perkins Caufield & Byers, builds large-scale solar power
plants and recently signed a long-term deal with California utility
PG&E (PG&E). "We’re at a more mainstream engineer/build stage,
and don’t expect hiring problems," O’Donnell added. "Google may
encourage more smart folks to seek careers in clean energy."
Given that a solar power plant can cost anywhere between half a
billion and a billion dollars or more, it appears Google will
concentrate on perfecting solar technology rather than get into the
utility business. "In terms of building power plants, hundreds of
millions of dollars is really not a large sum, so I hope they spend the
money in a highly leveraged way to get the most out of it," says John
Woolard, CEO of solar power plant startup BrightSource Energy, which is negotiating with utilities to supply 1.5 gigawatts of solar electricity.
are very active in the Southwest, and would look forward to working
with a group like Google on building out power plants," he adds. "I
never would have predicted that Google would emerge as a provocative
leader in large scale solar, but I am very excited about the
visibility it brings to an area of technology that we know has real economic potential."
Google already is working with two renewable energy startups. One is
eSolar, a Pasadena, Calif., developer of utility-scale solar thermal
power plants whose chairman is serial tech entrepreneur Bill Gross. The
other is Makani Power, a stealth Bay Area startup that is developing
what it calls "high-altitude wind energy extraction technologies aimed
at the most powerful wind resources." Page and Brin declined to say if
Google has invested in those companies.
PG&E spokeswoman Jennifer Zerwer said RE<C is "clearly a sign
of the growing awareness of and response to climate change — and that
is a positive trend, especially for those concerned about climate
change, as we are. While we did not work directly with Google on this
announcement, we team with them on their energy efficiency and
Like other California utilities, such as Southern California Edison
(EIX) and San Diego Gas & Electric (SRE), PG&E is under the gun
to obtain 20 percent of its electricity from renewable sources by 2010
and 33 percent by 2020.
The move into green energy is Google’s biggest departure so far from
its core search and advertising business. But Page noted it is not a
change of mission for Google.org, which currently is managing
initiatives to promote plug-in hybrid cars.
Brin and Page took pains to stress that RE<C makes good business
sense, with the potential to profit from Google’s stake in green energy
companies or technology the company develops. Still, acknowledged Brin,
"We’re not going for huge margins. We want to deploy this fast."
"This has the ability to change the world," he added.