Google has used its new status as an energy company to strike a deal to buy a large volume of electricity from an Iowa company that uses wind turbines to generate its power. Google will not be able to use the wind power in its data centers, but says the deal with NextEra Energy Resources is a better way to invest in green energy than the carbon offset certificates it will replace.
"We depend upon large quantities of electricity to power Google services and want to make large actions to support renewable energy," said Google senior VP of operations Urs Hoelzle in a post on the Google blog. "As we continue operating with the most energy efficient data centers and working to be carbon neutral, we’re happy to also be directly purchasing energy from renewable resources."
Under terms of the 20-year deal, Google Energy will purchase 114 megawatts of power capacity from Next Era's Story County II facility, which Google will then resell to the power grid through the regional spot market, taking advantage of its new status as an energy trading company.
"Buying renewable energy directly from the developer impacts the development of renewable energy projects in ways that are more meaningful than the purchase of Renewable Energy Certificates (RECs) from third parties," Google said.
The deal also provides price protection for Google, locking in a price for 20 years, during which energy prices could easily rise.
The agreement is exactly the kind of deal described by Google energy czar Bill Weihl in an April presentation, in which he noted that these deals may not provide renewable energy for Google data centers in the short run, but could lay the groundwork for a future transition.
“Supposing we had a facility scomewhere in the Midwest and have power contracts,” Weihl said, noting that Google typically signs multi-year utility contracts. “Let’s say there’s a developer who wants to build a wind farm on land nearby. We’d love to buy the power from that wind farm.”
With the ability to buy and sell power, Google Energy could sign a contract to buy the power generated by the local wind farm, and then resell that power on the open market until Google’s existing utility deal expires and the company can use the renewable power in its own facility, Weihl said.
Google operates a data center in Council Bluffs, Iowa, about 100 miles from the NextEra facilities.