Recently, Google announced that it has purchased a whopping 3 gigawatts of renewable energy capacity — equal to what all of its offices and data centers around the world use on an annual basis.
New clean energy purchases bring our total wind and solar capacity to over 3 gigawatts—enough renewables to match 100% of the energy it takes to run our products in 2017. pic.twitter.com/8ykaWO9LU0
— Google (@Google) November 30, 2017
The tech giant was able to hit this target of matching 100 percent of its energy use after closing new deals to buy wind and solar power generated in South Dakota, Oklahoma, and Iowa, adding to several purchases it has made since 2012.
It’s a significant accomplishment that affirms Google is more aggressive about buying renewable energy for its operations than any of its corporate peers. But let’s be clear: This does not mean Google is “powered” by renewables. Instead, the company hit this mark by buying renewable energy certificates (RECs), which ensure a certain quantity of wind and solar electricity is allocated to a given use. In other words, Google bought renewable power in quantities that match its use, even though that renewable electricity isn’t necessarily powering its operations directly.
“We are purchasing the energy and selling it back into the market in regions where we can’t consume it,” Google spokesperson Amy Atlas told me in an email.
But this isn’t just an accounting gimmick. RECs are a huge market driver for renewable power, and Google’s purchases are part of a larger trend of companies lighting a fire under utilities to build cleaner energy sources.
And in an era when the highest levels of government are undermining clean power, buying renewable energy is a major way for the private sector to advance the ball on climate change through moving toward lower-carbon generation. “We want our efforts to result in new renewable energy projects, not reshuffling the output from existing projects,” according to a Google blog post.
Google’s energy buys are significant because of their scale
Even in 2016, Google was buying more renewable energy than any other company in the United States, Europe, and Mexico, as this chart from Bloomberg New Energy Finance shows.
That’s partly because the company has such a massive energy appetite, matching its size (Alphabet Inc., Google’s parent company, has a market capitalization of more than $700 billion). In 2015, for instance, it devoured 5.7 terawatt-hours of electricity, about as much as the city of San Francisco uses in a year.
Among Google’s most voracious power guzzlers are the 15 data centers across the world that make up the “physical internet” — the servers running 24/7 to power the search engine and the cloud-based apps like Gmail.
Across the United States, data centers are increasingly supplanting smog-belching factories as the humming engines of the economy as industries expand their footprints online. They’re also soaking up 3 percent of the country’s electricity.
So it’s an important signal, to utilities and to other tech companies building energy-hogging data centers, that Google is taking such aggressive steps to buy renewable energy to offset the fossil fuels it relies on to power some of its operations.
Tech companies are forcing power providers to react
Big businesses pursue renewable energy for a variety of different reasons, as PwC found in a 2016 survey, but for utilities, these rationales all lead to increasing pressure to build more renewable energy.
“Companies [like Google] are large and important customers to utilities,” said George Favaloro, who leads the Sustainable Business Solutions practice at PwC, in an email. “When they say they want renewable energy, it matters a lot.”
Overall US energy demand is expected to hold steady while electricity consumption is projected to rise slowly, by 0.3 percent per year through 2040.
With little room to grow, electricity providers are in a race to the bottom to proffer the cheapest kilowatt to cling to market share. It’s part of what’s driving coal and nuclear power offline, since they can’t match the price of natural gas–fired generation and are losing money in many markets.
Renewables remain the only sources for which companies are willing to pay a premium, but in some parts of the world, they have already become the cheapest source of electricity. The combined forces of customer demand and market pressure are part of why renewables are now the largest source of new generation around the world.
Meanwhile, companies like Amazon are also stepping up to challenge Google’s crown in renewable energy procurement, adding to the push for utilities to build more wind and solar power.
“But it has to be more than buying RECs,” said Dale Sartor, a staff engineer at Lawrence Berkeley National Laboratory who studies technology efficiency. “You can’t buy your way to heaven.”
There is still vast room for improvement
The ultimate goal is for tech companies to power facilities like data centers directly with increasing amounts of renewable electricity.
Over the summer, Microsoft took a big step in that direction when it quit its utility, Puget Sound Energy. The software firm instead contracted directly with renewable electricity providers to buy 25 percent of the electricity used by its corporate headquarters in Redmond, Washington.
And Apple inked a deal this year with NV Energy to power its growing data center in Nevada.
However, even as these tech heavyweights sip more electrons from the sun and the wind, they’ll still need to cut energy consumption overall to reduce their environmental impact, especially since many of them are still expanding, explained Julian Kudritzki, chief operating officer of the Uptime Institute, a tech industry advisory group.
“‘Renewable’ is not a license to waste,” he said.
Building solar and wind farms, after all, has its own environmental footprint, and beyond electricity, facilities like data centers also require land and consume water. That means decarbonizing electricity isn’t enough for tech companies to offset their impact on the world; they have to do more with less overall.
The Uptime Institute is working with businesses to develop transparent metrics about how they use energy, but many companies are cagey about their power consumption and want to avoid scrutiny, especially if they’re falling short of their competitors.
Changing this requires a cultural shift in how the tech sector manages resources, but it also demands a broader rethinking of Silicon Valley’s relentless drive for growth, market share, and domination in a world hitting the limits of what it can sustain.
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