Keeping up with the Googles

You might have a big datacenter. You might even have a top 20 supercomputer. But are you negotiating 20-year energy leases with windfarms in Iowa? I didn’t think so, poser.

Google logoIn a continuing effort to find new ways of greening our operations, we will begin purchasing the clean energy from 114 megawatts of wind generation at the NextEra Energy Resources Story County II facility in Story and Hardin counties in Iowa on July 30 at a predetermined rate for 20 years

To be fair, Google isn’t buying the energy for its direct consumption. They intend to sell it on the spot market for energy, and are hoping that the long term contract will help stimulate larger investments in renewable energy in the US

In this case, we’re buying renewable energy directly from its source – the wind farm. We cannot use this energy directly, so we’re reselling it back to the grid in the regional spot market – but retiring the RECs associated with the power. By obtaining RECs through the purchase of green power, our deal has a greater impact on the renewable industry than simply buying “naked” RECs from third parties; our long-term commitment directly frees up capital for the developer to build more wind projects.

While we are happy to be purchasing renewable energy as part of our environmental commitment, this is also a structure that makes long term financial sense for Google. Through the long term purchase of renewable energy at a predetermined price, we’re partially protecting ourselves against future increases in power prices. This is a case where buying green makes business sense.

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