Google Unveils Green Energy Push
The search giant unveiled its Renewable Energy Cheaper than Coal, or REC initiative, on Tuesday--a set of strategies and investments to back projects aimed at producing electricity from alternative energy sources. REC will work in conjunction with its Google.org philanthropic arm to initially focus on developing solar, wind and geothermal power systems.
In the coming months, the company will hire engineers and energy experts, and partner with established renewable resource providers like Pasadena-based eSolar and Alamada-based Makani Power for solar and wind projects, respectively.
Though consumers and corporations alike have tried to "go green" over the past few years, coal still powers a majority of the electric power stations around the globe--and Google believes that a combination of science, philanthropy and capitalism can help change that.
According to Larry Page, Google's co-founder and president, products, the company's goal is to produce "one gigawatt of renewable energy capacity that is cheaper than coal ... in years, not decades." One gigawatt of energy can reportedly power a city the size of San Francisco.
"They're in a class by themselves," says James Elsen, CEO of the SustainLane, green-focused ad network. "Google has one of the largest solar array stations in the state of California planned, one of the largest hydroelectric powered data centers in the works, and they think about the interplay between social ventures like alternative power in the context of their day-to-day business--not split out as a separate philanthropic effort."
"The environment is not an afterthought when it comes to the way they run their business," he adds.
But industry consensus on whether the search giant was biting off more than it could chew with this ambitious initiative was mixed. Between the Lines tech blogger Larry Dignan wrote: "Unless Google is putting ads on windmills, it looks like a detour that could make shareholders squirm."
During Tuesday's press conference, Page acknowledged that the REC initiative is clearly not part of the "search, ads and apps" strategy that has fostered dramatic growth and sent company stock prices well above $700 per share. "This doesn't count as search and advertising," Page says. "But we do want to give our business some latitude to look into new areas, especially when they are strategic."
And as the company's energy consumption expenses continue to rise in line with their increases in search share, new tech developments and sprawling head count--investing in cheaper, renewable power sources is just plain smart business strategy.
According to Seth Bauer, editorial director of National Geographic's The Green Guide, Google's move could signal a turning point in the kinds of relationships that large, successful corporations have with their investors.
"Most companies would be too scared to try something this expensive, audacious and outside of their core product offering," Bauer says. "But Google has such an incredible track record and so much money at this point that the investors will probably just hang on for the ride. And if they didn't--I think Google's management team would try to take the company private again before they'd buckle under investor opposition."
Others note that because Google's plan includes hiring up to 30 engineers and others to join the effort within the next two years, "it's the kind of corporate leadership we need to see to help solve climate change and create healthy, renewable jobs here in the U.S.," says Matt Petersen, president of Global Green USA.
Ultimately, the green advocates say that Google's REC initiative will be good for both the environment and the economy--as, according to Bauer, "people recognize that our economy is stagnant in terms of developing a new industry. We're not likely to create a new billion-dollar manufacturing market. This push for renewable energy creates more than just jobs, it creates a whole new arena around which to build businesses."