Renewables Research to Get Boost From Google Goal to Oust Coal

Dec 6, 2007 - California Energy Markets

Google plans to spend hundreds of millions of dollars in coming years to make electricity from renewable sources cheaper than that generated from coal.

The "RE(C" initiative seeks to limit global warming, bolster energy production in developing parts of the world and make the Mountain View-based company money.

"Energy is a very big market," Google co-founder and products president Larry Page said in a conference call Tuesday. Fostering a profit-driven business system offers the best way to battle climate change, Page added.

The company's philanthropic branch, Google.org, will fund research in technologies, invest in new companies and conduct its own research and development. The firm will hire up to 30 energy experts, engineers and others in the next year or two.

RE(C aims to produce 1 GW of energy produced from renewable sources at a cheaper price than coal.

"We may help spark a green electricity revolution that will deliver breakthrough technologies priced lower than coal," Google.org Executive Director Larry Brilliant said in a press release.

"We're gonna try to make that happen now," Page said Tuesday. "We've seen technologies that we think can really mature into very capable industries."

While most of Google's business focuses on search and advertising, some of it-including the RE(C initiative-falls into an undefined area. But the effort fits Google's business model partly because of the company's power-intensive computer basis, said Sergey Brin, Google co-founder and president of technology. And much of that power stems from dirty sources. Coal supplies about 40 percent of the world's electricity.

"We don't feel good about being in that situation, as a company," Brin said.

Google wants to develop the technology and get it adopted as broadly as possible, he added. The company could build on-site and produce power for its data centers or sell the technology for others to produce power.

Google could also acquire or invest in companies in the U.S. or overseas that are working on related technology, as well as license technology to others or make profits on infrastructure. The company is already working with Pasadena-based eSolar Inc., which specializes in solar-thermal power, for instance, and Alameda-based Makani Power Inc., which develops high-altitude wind-energy technology.

"The goal is not to have huge margins here. The goal is to really replace the dirty energy that's out there," Brin said. "We don't feel we have to own every piece. We just want this problem solved."

Earlier this year, Google announced a goal to go carbon-neutral by the end of 2007. The company has installed a 1.6 MW solar-photovoltaic array at its Mountain View headquarters. Google.org also works on policies to encourage renewable-energy development. A $10 million request for proposals aims to speed up plug-in vehicle development. That effort drew more than 300 responses, showing high interest, Brilliant said.

But projects such as installing solar panels will not solve climate-change problems while prices for renewable energy remain high, Google's green energy czar Bill Weihl said Tuesday.

"We really need to accelerate the pace of technology development to drive the cost down much faster to make it competitive with coal," Weihl said, adding that renewable power must fall into the 1 cent to 3 cent/kWh range to compete with power from coal-fired plants, which ranges from 2 cents to 4 cents/kWh.

Conservation and policy remain critical components, Brin said. "This is one piece of the puzzle," he said of cutting renewables costs.

Not all expect Google to reach the goal or profit from it.

"It's a great thing for society. I'm not sure it's a great thing for Google," said Severin Borenstein, an economics professor and director of the University of California Energy Institute at Berkeley. "It's a pretty risky bet."

The move takes a chance on science and policy and may not make the company money, Borenstein said. He doubted renewable power's prices could beat coal without any carbon-sequestration limits. He also would prefer to see the federal government act as the primary funder of such research to ensure the public can access the results and knowledge, rather than a private firm owning it as property.

But federal funding in renewable-energy research has stalled in recent years, so Borenstein welcomed Google's step, along with similar funding that other companies may now make.

"There is a herd mentality in Silicon Valley and right now, the herd is moving toward renewable energy," he said.

Ralph Cavanagh, co-director of the Natural Resources Defense Council's energy program, agreed, noting venture capital invested in renewable technology. "There clearly is widespread interest," he said.

Cavanagh expects those efforts to pan out.

"It is not only possible but essential" to get renewables' prices below coal's, he said. "Google's interest lies in making it happen."

Along with other scientists, Hugh Pitcher, a scientist with the Joint Global Climate Change Research Institute at the U.S. Department of Energy's Pacific Northwest National Laboratory, has called for funding of such technology research.

"This is exactly the kind of initiative we need," Pitcher said. "Google has some funds to play with and I think it's fantastic that they're willing to go after something like this."

He questioned whether renewables could beat coal's cheap rates. And besides cheap energy sources, building a new electrical system entails ensuring reliability, capacity and the ability for different technologies to work together. But Pitcher also pointed to stagnant federal funding for energy research-and to venture-capital groups that have begun investing in renewable energy.

"People are beginning to understand that there's a real market and there's potentially money to be made," he said [Hilary Corrigan].