Google to Solve Energy Crisis

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Google is working on a project to make renewable energy cheaper than coal. They say they can do it in just a few years. They are investing millions. Google could become the biggest energy company worldwide.

VANCOUVER -- With a company worth twice as much as New Zealand's annual economic output and a share price that has roared into US$700 territory, Google Inc.'s founders can perhaps be forgiven for thinking they can do anything.

Larry Page and Sergey Brin were, after all, the online pioneers who turned a vast wasteland of digital clutter into a neatly-organized, searchable world that spews out profits -- and in the process blew apart the world's decades-old advertising models.

On Tuesday, they announced that even as they seek to conquer the mobile phone market and uphold their Internet dominance, they are going to try to solve the world's energy problems.

Google calls it the Renewable Energy Cheaper Than Coal project.

Beginning with about two dozen clean-tech staff engineers, and investments in the "tens of millions" from the company's philanthropic arm, google.org, the founders said they hope to produce low-cost clean energy -- and to do it soon.

"We really want to rapidly push forward and our goal is really to produce 1-gigawatt of renewable energy capacity that's cheaper than coal economically," Mr. Page said on a conference call Tuesday. A gigawatt is enough to power San Francisco.

"And we're optimistic that this can be done in years, not [the] decades that are usually quoted."

The company will first pursue solar thermal, wind and geothermal power -- technologies that, if they become sufficiently cheap, could seriously slow climate change and revolutionize the standard of living in many power-starved developing nations, Mr. Page said. Google plans to eventually invest "hundreds of millions" in those technologies it sees as yielding "profitable returns in reasonably short timeframes."

He admitted that those ambitions are tightly tied to corporate self-interest. Google runs dozens of electricity-sucking data centres and wants to find ways to power those more cheaply and renewably.

But, he said, "just providing energy for Google is not really enough of a goal. We want to provide energy that's cheap enough that it can replace significant amounts of the energy that are used today."

It is a wildly ambitious objective -- given that wind and solar today cost many times more than the Google goal of one to three cents per kilowatt-hour -- but was immediately met with applause by everyone from clean energy investors to the most dyed-in-the-granola environmentalists.

"It's something that might inspire other entrepreneurs to jump in. That's great," said Canadian environmental luminary David Suzuki.

"Google's getting involved is going to be the night-time dream of everybody who is out there in this business," added Mike Brown, the executive director of Canada's largest clean-tech fund, Chrysalix Energy Venture Capital.

Google is, of course, not the only company plunging into clean-tech, a field so faddishly hot right now that Mr. Brin defended the move by saying, "climate change is not something that is like bell bottoms or something like that." Wal-Mart Stores, Inc. has announced it will reduce greenhouse gas emissions by 20% over the next eight years, while Hewlett-Packard Co. said on Tuesday it will buy 90% of its energy at Ireland locations from renewable sources.

That announcement, however, was hugely overshadowed by Google's plans, which come from a company with extraordinary name strength.

"With Google it's particularly exciting because they have the brand, they have the financial muscle and they have the innovative mentality to move this forward. And that's very powerful," said Nick Parker, co-founder and chairman of Toronto-based Cleantech Group, which last year launched the New York Stock Exchange Cleantech Index, the only one of its kind.

That index has more than tripled the returns of the S&P 500 so far this year. However, neither it nor Google shares saw much movement yesterday, and some are skeptical that Google's on-line success will breed power-line success.

"Companies that are stepping beyond their core expertise are going to make mistakes," said MacMurray Whale, a technology analyst with Cormark Securities. "I treat it with a huge dose of skepticism in terms of their ability to make a difference where literally thousands of people over decade have been trying to do the same thing -- and haven't had huge success."

Still, Mr. Parker said, "it's going to take a certain audaciousness to get this done.

"There's no guarantee that the current incumbents are going to be the right players as we move into a completely new energy paradigm. It wouldn't surprise me if the Googles and the Wal-Marts are the major energy players of tomorrow."
Click to expand...

http://www.financialpost.com/trading_desk/technology/story.html?id=127486

Aceday, Dec 2, 2007 IP

guerilla Notable Member

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Well, this is how it is supposed to be done. People or companies willing to make a capital investment into R&D should be able to reap the rewards.

The big energy players are all standing around, waiting for government subsidies (our tax dollars) before making their moves.

Good for Google. This seriously disrupts the status quo of corporate political finance.

guerilla, Dec 2, 2007 IP

Fedorpheux Active Member

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guerilla said: ↑

...
This seriously disrupts the status quo of corporate political finance.
Click to expand...

Google seems to do that repeatedly.

Fedorpheux, Dec 2, 2007 IP

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Google to Solve Energy Crisis

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guerilla Notable Member

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