Despite barriers to Google becoming an electric utility in 2010 when the U.S. Federal Energy Regulatory Commission granted Google Energy the power to sell energy, capacity, and services at market rates, the company has yet to sell power directly to consumers or wholesalers.
Instead, Google has focused on its role as a consumer by signing a 10-year supply agreement with AES to build 500 MW of renewable energy assets for $600 million. This infrastructure allows Google to use renewable energy, provided by AES, to power its large footprint of data centers, achieving both a reliable supply of electricity and making progress on its pledge to be a 100% carbon-free business by 2030.
USE CASE AND BUSINESS IMPACT
In addition to contracting with AES, Google created the carbon intelligent computing platform, which automatically schedules nonurgent tasks to be processed only when renewable resources are available. It does so by pairing its task load with renewable forecasting data from the startup Tomorrow. Along with this load shifting, Google is working with AES to diversify resources across wind, solar, and water to compensate for the shortcomings of each. The company is building energy storage and overbuilding resources. AES is also a Google customer, using its platform to analyze smart meter data from its residential customers. The relationship benefits both firms, with Google gaining consistent power, and AES gaining customer insight.
Google's actions demonstrate the best pratices of an IT firm with respect to playing a role in the energy transition, highlighted in our report, The Energy Transition of the IT Sector: Market Forecast and Opportunities. The report shows there are opportunities for both IT firms and utilities, where the utility can help the IT firm meet its carbon-reduction targets by providing renewable resources. The IT firm can provide data tools to improve the utilty's operations and customer management. The partnership is not only advantageous but vital, as IT firms are among the largest consumers of electricity generated by traditional means, and utilities lack cohesive data platforms. Firms should monitor Google while adopting its best practices.