Google Seeks To Tap Power Markets
The Wall Street Joural
As Google Inc. grows, so does its appetite for energy.
The Internet giant has taken the unusual step of applying for approval from the Federal Energy Regulatory Commission to become an electricity marketer, essentially giving it the authority to buy and sell bulk power at market prices, just the way large utilities and energy traders do.
The company, which made the application last month through its Google Energy LLC subsidiary, says the change will help it better manage supplies for its own operations and give it greater access to renewable energy sources. The move offers an indication of just how much electricity large tech firms now consume in order to run their sprawling networks of servers and mainframes.
Although more than 1,500 companies currently have status as energy marketers, the vast majority are utilities or power generators. The move is unusual for a tech company, though some industrial concerns that operate stores or factories, such as fixture-maker Kohler Co., smelter Alcoa Inc. and grocer Safeway Inc, have approval from FERC.
Google's power usage is unclear; it doesn't disclose how many data centers it operates or where they are located. Last April, it said its data centers were the most efficient in the world, so far as it was able to determine, but declined to say how much power it actually uses.
Rich Miller, editor of Data Center Knowledge, an online publication that tracks the data center industry, says he has identified about 24 Google data centers and calculates the company's energy consumption is roughly equivalent to two large conventional power plants.
Mr. Miller says it is common for large operations run by Internet companies to have capacity of 30 to 50 megawatts of power.
Google's largest data centers could use even more. A data center consuming 10 megawatts is about what a large retail store or a subdivision of single-family homes consumes.
Google doesn't disclose how many data centers it operates or where they are located, but Mr. Miller noted that Google is focused on improving its energy efficiency at its data centers, 24 of which have been identified globally, including seven or eight large ones in the U.S. That would make its total energy consumption roughly equivalent to two large conventional power plants.
In 2007, Google announced its intention to become "carbon neutral," meaning it would take actions to neutralize the effects of carbon dioxide produced in the course of furnishing its buildings and data centers with electricity. It installed a 1.6-megawatt solar array on its headquarters building and has been trying to obtain green power, when available.
If its FERC request is granted, "we could go directly to a renewable energy project and buy power for our operations," says Google spokeswoman Niki Fenwick. The company also wants the ability to enter into contracts for carbon offsets.
Google's FERC application could also potentially allow the company to play a much larger role in energy markets, even becoming a wholesaler of electricity to other big buyers.
In its application, the company said it was reserving for itself the right to "act as a power marketer, purchasing electricity and reselling it to wholesale customers," and trading "in the bulk power markets, such as arranging...transmission and fuel supplies."
Ms. Fenwick says the company has "no plans" to sell its energy management services to others or to become a speculative energy trader, but she acknowledged the "green team" it has formed "is not sure what we're going to do."
A FERC spokeswoman says the commission's primary concern is market dominance and since Google doesn't own power plants or utilities, that's not likely to be an issue. But the commission could ask for clarity on Google's plans, since it's an unusual applicant, she added.
Google has a long history of downplaying forays into new areas, only to later surprise competitors with new products and services. When the company announced its mobile operating system, Android, in 2007, it tried to dampen speculation that it would build a Google-branded cellphone, calling the announcement "more ambitious than any single Google phone." This week it began selling a Google-branded, Android-powered phone which it designed, called Nexus One, exclusively through a new Google online phone store.
In 2008, the company made an unsuccessful bid for wireless spectrum, fueling speculation that it would start selling phone services to consumers. Google didn't elaborate on what it planned to do with the spectrum, but said it entered the auction to force the winner of the spectrum to open up it to a range of devices. Since then, the company has begun to offer different types of phone service, including Google Voice, an Internet-based call-routing service.
Google has been focusing more attention on energy markets lately. It is partnering with several utilities, including TXU Energy and Sempra Energy, to offer consumers a free energy-use monitoring tool, called Google's PowerMeter, that takes readings from digital "smart" meters and other devices to show a household's energy consumption to help consumers make choices that can save money and cut power industry emissions. That doesn't require permission from FERC.
Appliance maker Whirlpool Corp. has looked at the software since it's keen on developing tools to help consumers maximize the benefits offor "smart" appliances it intends to market. Warwick Stirling, Whirlpool's global director of energy and sustainability, said Thursday the tool is "a good first step," but isn't simple enough to satisfy the needs of the appliance industry.
Other technology companies that aren't conventional energy players, like Microsoft Corp. and Intel Corp., also are studying energy markets for opportunities to make money by helping the nation improve the efficiency of the electricity business.
The Internet giant has taken the unusual step of applying for approval from the Federal Energy Regulatory Commission to become an electricity marketer, essentially giving it the authority to buy and sell bulk power at market prices, just the way large utilities and energy traders do.
The company, which made the application last month through its Google Energy LLC subsidiary, says the change will help it better manage supplies for its own operations and give it greater access to renewable energy sources. The move offers an indication of just how much electricity large tech firms now consume in order to run their sprawling networks of servers and mainframes.
Although more than 1,500 companies currently have status as energy marketers, the vast majority are utilities or power generators. The move is unusual for a tech company, though some industrial concerns that operate stores or factories, such as fixture-maker Kohler Co., smelter Alcoa Inc. and grocer Safeway Inc, have approval from FERC.
Google's power usage is unclear; it doesn't disclose how many data centers it operates or where they are located. Last April, it said its data centers were the most efficient in the world, so far as it was able to determine, but declined to say how much power it actually uses.
Rich Miller, editor of Data Center Knowledge, an online publication that tracks the data center industry, says he has identified about 24 Google data centers and calculates the company's energy consumption is roughly equivalent to two large conventional power plants.
Mr. Miller says it is common for large operations run by Internet companies to have capacity of 30 to 50 megawatts of power.
Google's largest data centers could use even more. A data center consuming 10 megawatts is about what a large retail store or a subdivision of single-family homes consumes.
Google doesn't disclose how many data centers it operates or where they are located, but Mr. Miller noted that Google is focused on improving its energy efficiency at its data centers, 24 of which have been identified globally, including seven or eight large ones in the U.S. That would make its total energy consumption roughly equivalent to two large conventional power plants.
In 2007, Google announced its intention to become "carbon neutral," meaning it would take actions to neutralize the effects of carbon dioxide produced in the course of furnishing its buildings and data centers with electricity. It installed a 1.6-megawatt solar array on its headquarters building and has been trying to obtain green power, when available.
If its FERC request is granted, "we could go directly to a renewable energy project and buy power for our operations," says Google spokeswoman Niki Fenwick. The company also wants the ability to enter into contracts for carbon offsets.
Google's FERC application could also potentially allow the company to play a much larger role in energy markets, even becoming a wholesaler of electricity to other big buyers.
In its application, the company said it was reserving for itself the right to "act as a power marketer, purchasing electricity and reselling it to wholesale customers," and trading "in the bulk power markets, such as arranging...transmission and fuel supplies."
Ms. Fenwick says the company has "no plans" to sell its energy management services to others or to become a speculative energy trader, but she acknowledged the "green team" it has formed "is not sure what we're going to do."
A FERC spokeswoman says the commission's primary concern is market dominance and since Google doesn't own power plants or utilities, that's not likely to be an issue. But the commission could ask for clarity on Google's plans, since it's an unusual applicant, she added.
Google has a long history of downplaying forays into new areas, only to later surprise competitors with new products and services. When the company announced its mobile operating system, Android, in 2007, it tried to dampen speculation that it would build a Google-branded cellphone, calling the announcement "more ambitious than any single Google phone." This week it began selling a Google-branded, Android-powered phone which it designed, called Nexus One, exclusively through a new Google online phone store.
In 2008, the company made an unsuccessful bid for wireless spectrum, fueling speculation that it would start selling phone services to consumers. Google didn't elaborate on what it planned to do with the spectrum, but said it entered the auction to force the winner of the spectrum to open up it to a range of devices. Since then, the company has begun to offer different types of phone service, including Google Voice, an Internet-based call-routing service.
Google has been focusing more attention on energy markets lately. It is partnering with several utilities, including TXU Energy and Sempra Energy, to offer consumers a free energy-use monitoring tool, called Google's PowerMeter, that takes readings from digital "smart" meters and other devices to show a household's energy consumption to help consumers make choices that can save money and cut power industry emissions. That doesn't require permission from FERC.
Appliance maker Whirlpool Corp. has looked at the software since it's keen on developing tools to help consumers maximize the benefits offor "smart" appliances it intends to market. Warwick Stirling, Whirlpool's global director of energy and sustainability, said Thursday the tool is "a good first step," but isn't simple enough to satisfy the needs of the appliance industry.
Other technology companies that aren't conventional energy players, like Microsoft Corp. and Intel Corp., also are studying energy markets for opportunities to make money by helping the nation improve the efficiency of the electricity business.
