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Why Google's Future Growth is in Energy

How to save energy through both societal and individual actions.

Why Google's Future Growth is in Energy

Unread postby Graeme » Sat 10 Jan 2015, 18:22:51

Why Google's Future Growth is in Energy

Google's new energy play
The Nest thermostat might seem like just another smart device for the home, but that thermostat has the potential to be your home's automation hub. Locks, lights, garage doors, security cameras, and much more can connect to Nest, which will be able to control the household devices and even store data through Google's online products.

Where this gets interesting is with something called demand response in Nest's Rush Hour Rewards program. Put simply, demand response is a network of homes or businesses that will "respond" when a utility's energy costs are high, turning down demand in a predetermined way. Maybe it's turning off the air conditioner, delaying a washer cycle, or deactivating the charger to your electric vehicle. Demand response adds value to the utility because it can avoid paying the high cost of using peaker plants at peak demand times. Meanwhile, customers are compensated for dialing down demand upon request.

Rush Hour Rewards is Google's demand response program. While it doesn't work everywhere, if a utility in your area participates in the program you could save money by simply signing up and allowing Google to automatically turn down your load when your utility wants you to. This could turn into a big business for Google.

Why this will be a big business for Google
Rush Hour Rewards are fairly new, and it's not clear what the financial impact will be for Google, but it could open up multiple revenue streams. I think Google will be able to collect a fee from utilities, similar to the way in which demand response companies make money for providing their services, in addition to saving homeowners money. The bigger impact might be in device sales, which is a new business for Google.

Nest's line of devices is growing, now including a smoke and carbon monoxide alarm, and these device sales could become a significant portion of Google's revenue if they are widely adopted. The "Works With Nest" line of products that are made by third parties and augment Nest could open up a new revenue stream for software and firmware licenses.

On the back end, Google is using its own apps to access data from Nest-compatible products. This is another way to get people using more Google products, much in the same way Android draws consumers closer to Google.

Finally, energy Google does well
Google has proven it isn't an expert in making energy, but it is an expert in collecting and aggregating data. That's the Nest thermostat's likely role in home automation, and Google can leverage its capabilities to grow in home energy management and demand response, potentially saving consumers and utilities millions of dollars in the process.

Home automation is right up Google's alley, and this time it might have found a way to win in energy. Look for Nest to be the product that leads Google into the future of energy.


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Re: Why Google's Future Growth is in Energy

Unread postby Graeme » Sat 10 Jan 2015, 18:44:14

Google Invests $157 Million In 104 MW Utah Solar Plant

Google has a long history of investing in wind and solar power plants. It is now getting a lot of its electricity from wind and solar. One of its more interesting clean energy investment stories is that it invested $145 million into a solar power plant in California that was being installed on a former oil field. Its most recent investment, its 18th in a renewable energy project, is also an interesting one. It is investing in a solar power plant that is being built in Utah (in the United States) by a Norwegian company, Statec Solar.

It’s quite a large project. With a capacity of 104 megawatts (MW), it would have been the largest solar power plant in the world just back in 2011. It is now far below the record 550 MW Topaz Solar Farm developed by 2015 Zayed Future Energy Prize finalist First Solar, but it is still big. It’s Statec Solar’s largest to date in North America.

Google is investing $157 million in this project, with Prudential Capital Group investing the rest. “Google is providing tax equity and Prudential debt financing for the project, while Scatec Solar is providing sponsor equity. Total investment in the plant will come to US$188 million,” according to PV Tech.

Once complete (scheduled for the end of 2015), Google and Scatec Solar will jointly own Red Hills Renewable Energy Park, the name of the project.

Google’s renewable energy project investments now come to $1.5 billion. This is no charity. This is about financial benefit as well as helping to protect the climate, air, and water.


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