Ken Silverstein | Nov 18, 2013

The two have rendezvoused again: Google and private equity investor KKR are teaming to build six solar plants, which according to the popular search engine, is part of its plan to help bring renewable energy to scale so that it is more accessible to other entities. Working?

That depends on whom is questioned. But it is clear that not just Google but also the other internet giants such as Apple, Facebook and Microsoft have missions to become greener and more efficient. All are on a journey to power their energy-intensive data centers with more sustainable fuels -- facilities that are huge consumers of energy. In many such cases, the companies have concluded that investing in modern enterprises is a more prudent approach than running those businesses, where the experts know best.

“You’d think the thrill might wear off this whole renewable energy investing after a while,” says Kojo Ako-Asare, head of Google’s corporate finance. “Nope -- we’re still as into it as ever, which is why we’re so pleased to announce our 14th investment ... “We’ve committed hundreds of millions more -- more than $1 billion in total -- to renewable energy projects around the world.”

Google is specifically investing $80 million in the $400 million deal with KKR, in a project to be completed by Recurrent Energy next year. The six plants, of which five will go up in Southern California and of which one will run in Arizona, will generate 106 megawatts. That’s enough to power 17,000 homes, says Google. Southern California Edison will buy all the electricity.

Google and KKR last hooked up in 2011. That’s when the two invested $94 million in four solar facilities near Sacramento, Calif., also developed by Recurrent. That energy is fully contracted by the Sacramento Municipal Utility District. Google also says that because the lack of financing has been a hurdle for most developers that it has committed to buying electricity generated by others under so-called power purchase agreements. It has signed deals, for example, in which it will buy 570-megawatts of wind energy.

Beyond Google, Facebook has said it will fuel a data center in Iowa that will be up-and-running by 2015 by using exclusively wind energy. Also, by 2015, the company says that it wants to see a quarter of its electricity generated to come from green sources.

Nice Breaks

And, Microsoft has vowed to become carbon-neutral and has, most recently, agreed to buy wind energy produced in Texas through a 20-year power purchase agreement. It also has solar and hydro units that generate electricity that are exclusively meant for its data facilities. It is, furthermore, buying renewable energy credits in which the electricity produced does not necessarily flow to its buildings but it does give the developers some certainty.

Apple, meanwhile, has a goal of powering every one of its facilities using entirely green energy, or solar, wind, hydro or thermal. “Our investments are paying off. We’ve already achieved 100 percent renewable energy at all of our data centers, at our facilities in Austin, Elk Grove, Cork, and Munich, and at our Infinite Loop campus in Cupertino. And for all of Apple’s corporate facilities worldwide, we’re at 75 percent, and we expect that number to grow as the amount of renewable energy available to us increases. We won’t stop working until we achieve 100 percent throughout Apple,” the company's website says.

To be sure, skeptics are making two general points. That is, those internet and social media enterprises would not proceed unless generous tax breaks or subsidies were offered, and their green facilities will still need back up power consisting of natural gas. Google, for instance, has accessed the 30-percent tax credit offering by the government in the form of up-front cash.

The race to get these latest projects built is because the 1603 Treasury provision will expire -- the one that has extended the production tax credit of 2.2 cents per kilowatt hour of electricity generated. The same program has also lengthened the cash credits for those deals that started in 2013 but which are completed in the next year. It is unlikely that the tax plan will get re-enacted by year-end, although down the road, lawmakers could go back and make it retroactive.

The various energy camps will undoubtedly continue to debate the merits of their fuel sources compared with those of the competition. But the investments being made by Google, as well as Apple, Facebook and Microsoft, are taking money that has been sidelined and putting it into productive assets -- allocations that are putting people to work and helping developers achieve new economies and greater efficiencies.

Those are proud achievements, those businesses contend: They not only further their own quests to achieve full sustainability but they will also assist other entities that may want to do their small part.

Twitter: @Ken_Silverstein

 

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