Google's green power play
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 tech startups.
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 warming crisis.
“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 appropriate.
John O'Donnell, executive vice president of Silicon Valley solar energy startup Ausra, said he welcomes Google's bid to become a green energy player.
"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.
"We
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 renewable efforts."
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.





















