Google's Quest

Google's Quest

January 22, 2010

Ken Silverstein
EnergyBiz Insider
Editor-in-Chief

Google's ability to gather and disseminate information may now extend beyond the search engine and into the world of electricity. It's not a power grab; rather, it's an attempt to what it says will revolutionize energy technology and in doing so, create cleaner air for all to breathe.

While its desire to expand its presence in the energy realm has been made clear, it has taken another step toward expanding its reach into utility circles: Specifically, it has just asked the Federal Energy Regulatory Commission for the ability to buy and sell electricity so as to manage the high cost of its own data centers.

It's not unusual for major consumers of electricity to engage in such power marketing as a way to bypass their local utilities in the hopes of controlling costs. Big businesses such as Dow and Walmart have their own energy managers. Google says that its foray into energy trading is about more than reducing its expenses and also about being able to buy more green energy.

To assuage any concerns by FERC or consumer groups that it would leverage its vast empire in any way to distort energy markets, it said that it does not intend to own any generation or transmission. It has asked for an answer by February 23.

The company has set a set a goal of becoming carbon neutral. Most recently it joined several other high profile enterprises and environmental organizations in urging global policy makers to formally adopt such constraints. One of the key methods it has espoused is giving consumers everywhere the tools they need to see their energy consumption in real or near time. That would reduce energy usage by 15 percent, Google says.

Toward that end, it has developed an online tool called PowerMeter that can be provided through a local utility. Google's application to FERC is unrelated. But it all signals the online search engine's desire to provide critical information to users -- data that it says can be used to make the world a better place. For example, it says that if just half of all American citizens cut their energy use by 10 percent, carbon reductions would equate taking 8 million cars off the road.

To do so, Google says that state public utility commissioners must facilitate the development of intelligent utilities. That involves the replacing of 40 million older meters with digitized ones that permit utilities to communicate with their customers. Likewise, it applauds federal lawmakers for allocating $4.5 billion to those new technologies.

"Google's mission is to organize the world's information and make it universally accessible and useful," says Edward Lu, advanced projects program manager with Google before Congress. "We believe that access to information about personal energy consumption is critical to helping consumers save electricity and money, but unlocking this data requires upgrading the electricity grid to make it smarter."

Rapid Changes

Google is hitting the pavement to promote its causes. It began nearly three years ago when it made a voluntary commitment to becoming carbon neutral. The company has stated through press releases that its actions will match it words, noting that it buys carbon offsets and that a third party verifies the transactions.

The offsets, however, are part of a broader effort. It's more enduring goal is to advocate for the development of utility-scale renewable power, it says, adding that it has funded wind and geothermal projects. And while it says that it does not intend to own such generation, it does say that having the ability to buy and sell electricity on wholesale markets gives it the wherewithal to buy green energy.

It says that it will also build more efficient data centers. In fact, Reuters references the U.S. Department of Energy, which says that information technology and telecommunication providers such as Google account for 3 percent of all electricity use in this country. Google is focusing on its consumption. But it will continue to develop the tools to empower homeowners to do the same with solutions like PowerMeter.

Google's desire to innovate and to develop products that may be used by the masses is one thing. But its need to get into power trading is another.

Wholesale electricity markets have literally been transformed over the last decade. Before its downfall, Enron was touted as the progressive modern company that would exemplify the 21st Century. It and other nimble marketers were then replaced in part by the now-beleaguered investment banks that had the resources and knowledge to make those trading platforms both liquid and transparent.

Enter the era's new White Knight: Google. Some of the apprehension by others is that its ambitions may ultimately backfire and give the trading sector yet another black eye. Google, of course, is new to the field and may lack the expertise.

"I think they're in the wrong place," says Scott Spiewak, vice president and counsel for Metromedia Energy. "If they want to purchase power for their own energy needs, they'll need to look into the status of deregulation in the states in which they have their facilities. If there is some form of retail access in those states, they can be customers of retailers. Being licensed to do wholesale business would be beside the point."

The skepticism is understandable. But Google's participation in the energy sector that it is now on the cusp of enormous change will likely turn out to be healthy chapter in the industry's life. In this case, knowledge is literally power -- an opportunity that Google says will give everyone a chance to save energy and cut emissions.