Who would have known that the answer to our energy crisis and inevitable global warming would be from a company that made its money selling advertisements to people searching for “Britney Spears naked.” Google.org, the philanthropic arm of Google, has announced a new initiative that drives home a goal with a very awkward title: “Renewable Energy Cheaper than Coal” which they’re shortening to the ever geeky moniker “RE<C.” Google’s trying to create a simple to remember “E=MC^2-like” equation for the renewable energy market. Here’s a summary of some of the issues:
Listen to the Spark Minute. John Scott and David Spark from Green 960 in San Francisco, CA talk about Google’s renewable energy plans (Run time: 6:51).
Audio clip: Adobe Flash Player (version 9 or above) is required to play this audio clip. Download the latest version here. You also need to have JavaScript enabled in your browser.
Download the MP3 (right-click, select Save Target As…)
Watch my appearance on KQED San Francisco’s “This Week in Northern California” with Belva Davis talking about Google and their renewable energy plans.
They’re branding the renewable energy business better – While Google has already been investing in solar and wind energy, that’s not registering with the public. The company’s new initiative has been translated in a more comprehensible way. Like JFK promising that the U.S. space program will put a man on the moon, Larry Page offered Google’s goal, “To produce one gigawatt of renewable energy capacity that is cheaper than coal. We are optimistic this can be done in years, not decades. (One gigawatt can power a city the size of San Francisco.)” Larry and Google didn’t specify how long 1 gigawatt could power San Francisco.
Google needs this – The company has mounting energy costs and it needs more solutions. Larry Brilliant, Executive Director of Google.org said, “We have a need ourselves to be a buyer of clean energy. As a fast growing company we realize that if we don’t become part of the solution we will become part of the problem.”
You can’t argue with cheaper – Much of green and renewable energy marketing has focused upon individual’s compassion to do something about global warming and the energy crisis. While Google’s RE<C supports those theories, it doesn’t require others to. It plays upon the one issue everyone universally agrees-cheaper energy.
Google’s going after a big problem – Google claims that coal supplies 40% of the world’s electricity and it’s also emitting a lot of carbon dioxide. If the stated goal is achieved, it could solve a very big problem.
Google’s got competition – There’s an endless number of competitors in this space but none of them have the brand recognition of Google, nor can any of them can have such worldwide impact with a strong branded announcement. Wired.com reviewed recent investments in clean technology:
In Silicon Valley alone, investment in clean technology shot up from $34 million in the first quarter of 2006 to $290 million in the third quarter, according to an annual report by Joint Venture. Nationwide that year, venture capitalists invested a total of $727 million in 39 alternative energy start-up companies.
Google will acquire competitors – If acquiring a competitor will help the company achieve its goal, it will do it. It much rather do that than be in competition.
Let’s reduce the greenhouse effect AND make money – It’s the theme of the event that Brilliant finds most enticing: “You can make money by going into the renewable energy business.”
They’ll use themselves as guinea pigs as they’ve already been doing – Google has one of the largest corporate solar panel installations generating 1.6 megawatts of power. The company also has renewable energy initiatives through eSolar (solar thermal power) and Makani Power (wind energy extraction power). This is not a new business for Google and the search giant will be more than happy to use themselves as guinea pigs to test a solution. The company claims to be on track to be carbon neutral by the end of this year.
How much are they going to spend? – Google has been incredibly vague on how much money they plan on spending. One statement says they’re going to spend tens of millions of dollars in 2008 while at the same time saying Google will spend hundreds of millions of dollars with no specified timeframe.
Why is this a Google.org initiative? – I thought Google.org was a non-profit initiative but Larry Page has made it clear that this will be a for profit initiative that will “generate positive returns.”
They’re hiring – This is the number one reason for the public announcement. They’re hiring and they want to entice the best talent away from competitors. They don’t want just engineers but also scientists, chemists, physicists, material scientists, and plenty more.
Come for the free meals, stay to make clean energy history – Admittedly, Google is trying to solve its own energy needs, but by announcing it can solve the problem in years not decades will attract talent that could actually still be around when a solution is created.
If Google can pull this off, it will dwarf every division in the company – A lot of people use search, but everyone uses energy. If discovered, Google plans on licensing this technology out to others. That could be huge.
Should stockholders be worried? – Some were shocked with the announcement and others think with too much cash on hand they may be heading down a road that will be spreading themselves too thin. But Google.org said the company already seeded this initiative back in 2004 with 3 million shares in stock. Up until now Google has only been an ad serving company and its odd they’re going into a business that doesn’t appear to be an avenue for display ads.
Thanks to Elinor Mills of CNET News.com for providing transcript of her interview with Larry Brilliant for a couple of the quotes in this post.
