Google Energy in wind-energy deal

22 Jul 2010

Google to power several data centres in a 20-year deal with NextEra Energy Resources, as part of its greening strategy.

Google Energy has entered into a 20-year power purchase agreement with NextEra Energy Resources. It will purchase 114MW of clean, renewable energy from NextEra Energy Resources’ Story II Wind Energy Center. The wind farm has been in operation in Iowa since 2009.

NextEra Energy Resources is a subsidiary of NextEra Energy and it has more than 9,000 wind turbines in operation at 77 wind farms in 17 states and Canada.

 Wind Energy

How the wind-energy deal will work

On its corporate site, Google said the deal is a first for Google Energy LLC to allow it to procure large volumes of renewable energy and participate in the wholesale market.

“Buying renewable energy directly from the developer impacts the development of renewable energy projects in ways that are more meaningful than the purchase of Renewable Energy Certificates (RECs) from third parties. RECs allow energy consumers to identify and track power made from eligible sources of renewable energy. They have value and are typically bought and sold independently of the electricity from which they are generated.

“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.”

In addition, it said the deal would also make 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.”

Solar PV

Since Google made the announcement in 2007 that it was to become carbon neutral, it has been gradually diversifying into the green energy space. For instance, its Mountain View California headquarters have been powered by 1.6 megawatts of solar photovoltaic panels since 2007.

Carmel Doyle was a long-time reporter with Silicon Republic