Google’s purchase of twenty years worth of renewable energy from an Iowa wind farm is more of a business decision than Google.org’s philanthropic investments in clean energy. But last week’s announcement, contrary to some blogosphere reaction, does not make Mountain View a competitor in the energy sector.
Google touts the purchase of 114 megawatts of power from NextEra Energy, the first deal by subsidiary Google Energy, both as a “reduce-our-carbon footprint” measure and as a protection against future increases in power prices.
“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,” said Urs Hoelzle, Google’s senior vice president for operations.
In other words, Google is investing in NextEra, albeit less formally than it did in May when it announced it was injecting $39 million into the company.
The Wall Street Journal was right to note the move “marks a departure from Google’s initial approach to renewable energy, which focused on investing in early-stage renewable energy companies” developing plug-in cars and cheaper- than-coal alternatives.
But to call Mountain View’s latest expenditures “speculation,” or “silly and undisciplined” overlooks how Google plans to establish itself as energy utility or what the enviros at Grist call “a newtility.”
“Our over-arching vision is that one day a large portion of the world’s vehicles will plug into an electric grid fueled by renewable energy,” says Google.org.
Today, the market nexus between electric cars and the grid is infinitesimal. In twenty years, it will be exponentially larger and Google plans to be there, monetizing your relationship with your vehicle.
Postscript: Google’s 2030 Energy Plan does not seem to have been updated since the early days of the Obama administration, which was only yesterday or a different political epoch depending on your sense of history.