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Great work. Specifically, Google purchases 3 GW of renewable energy and sells it to the grid at a loss.[1] This isn't the same as being directly powered by ren

by allenz 9y ago

Great work. Specifically, Google purchases 3 GW of renewable energy and sells it to the grid at a loss.[1] This isn't the same as being directly powered by renewables because they don't have to worry about time shifting supply and demand, which is often done using natural gas. [1] cloud.google.com/environment/

fulafel 9y ago
Incidentally, this is close to how it works (at least around my part of the world) when you as a residential customer choose to buy solar/wind generated electricity. The retail electricity providers sell you electricity from a spot market (see https://en.wikipedia.org/wiki/Electricity_market#Wholesale_electricity_markets https://en.wikipedia.org/wiki/Electricity_market#Wholesale_e...) and you pay the local power comapny to send you the electricity over the national grid. BTW there's a big difference here between GW (power) and energy - do they contract 3 GW 24/7 or are they buying 24*3 GWh per day whenever the spot prices are lowest, or are they paying companies to average 3 GW per day over a multi year contract? In the first scenario there will be surplus over 3GW for most of the day.
- allenz 9y ago
  3 GW measures average power. Google just buys the entire output of wind or solar farms, so supply is not matched with demand.[1] This is a known problem with renewables. Elon Musk claims that he can solve it with a relatively small area of batteries like the Powerpack, but he's sold less than 1 GW so far because batteries are expensive. [1] https://environment.google/projects/announcement-100/ https://environment.google/projects/announcement-100/
  - fulafel 9y ago
    I guess that accounting is natural for marketing numbers. I don't generally think it's a problem, it's just a feature of those generation methods and just means we need overprovisioning. Whereas fossil fuels have unsurmountable problems and cause untold human suffering, famines and damage to the environment.
    - allenz 9y ago
      I think that Google has made a fantastic step forward. However, solar and wind require some form of energy storage, such as pumped hydro or batteries (which Google hasn't addressed). Overprovisioning by itself isn't sufficient.
ZeroGravitas 9y ago
A more important caveat is that it's only talking about their electricity usage, presumably people still drive to work in ICE cars, fly airplanes, ship devices around the world, the accounting for even just electricity usage can extend out to suppliers and suppliers of suppliers etc. But it's still a very good thing and others should follow suit. Also, can you show your working for them "selling at a loss". They generate renewable energy then sell the energy and keep the certificates that say it's renewable, those are both worth something. Are you saying they could have bought the certificates on the open market for less, because I don't think that's the case.
- allenz 9y ago
  Google's report from 2013, cited from their blog, says that they resell electricity at a "slight net loss".[1] I didn't compare to buying RECs. The point is that Google is 100% renewable voluntarily. While RECs may be worth some tax credits, it's obviously a net cost or else Facebook would also be 100% renewable. That said, I'm fairly confident that Google's approach is more costly than just buying RECs because demand for RECs is not very high. Google doesn't buy RECs directly because they want stronger guarantees of additionality: "Buying a few years’ worth of RECs from a renewable project does not provide the stable and sizable cash stream that a renewable project developer needs to get financing to build new green power projects. In a PPA [power purchasing agreement], Google is agreeing to buy all the power from a project for many years. Google has, in effect, totally accepted the power price risk that the project owner would otherwise face—instead of taking the risk of selling into the power market on a short-term basis, Google is providing the seller with a guaranteed revenue stream for 20 years. This is something the developer can literally take to the bank. If we were to buy only the RECs, this would represent a fraction of the value of a typical power project,5 and would still leave the renewable developer to face the market risks of future energy prices, making it much harder for them to obtain financing for projects. [1] http://static.googleusercontent.com/external_content/untrusted_dlcp/cfz.cc/en/us/green/pdfs/renewable-energy.pdf http://static.googleusercontent.com/external_content/untrust...
cosmic_ape 9y ago
Can anyone explain this: If all they do is buy and sell electricity from renewable sources, while using the regular grid to actually power the data-centers, then why do they do it at all? Is it a form of philanthropy?
- ZeroGravitas 9y ago
  Even if they were powering their data-centers directly from renewable sources, bypassing the grid, it would still be a form of philanthropy to whatever degree it raises their cost beyond burning coal and dumping the pollution on someone else. Since global warming is a global problem (and other forms of pollution from burning coal or gas can travel long distances) it doesn't matter where the carbon is saved, it's basically equivalent, so they're just being pragmatic in their philanthropy. This could be thought of as a subset of their wider goal to be carbon neutral (which again, could be described as philanthropic in nature), presumably funding the roll out of renewable energy seemed like a cost effective way to work towards that goal.
  - cdancette 9y ago
    I don't get why this is the same thing : if every company is doing this, every company is still powered by fossil fuels, and just producing renewable energy that won't be used anywhere. Edit: as the energy they buy is sent into the grid, if all companies do this, the renewable energy can be sufficient to power all companies, so I guess that makes sense
    - ZeroGravitas 9y ago
      There is some cost to integrating renewables into the grid, though most experts seem to suggest the first 80% or so isn't that hard, and we're so far away from that in most places that the positive externalities massively outweigh any negative. If people did use this model to get to 100% then presumably the final 20% or so would be more expensive, since you'd still be paying grid prices for your usage, then selling the same amount of renewable power to try to cancel out that cost. If that renewable power is worth much less, because of integration costs, then you'll be paying much higher costs overall. (Note, paying much higher costs is a good thing, since it gives a market incentive for people to invest in storage technologies, demand/response, efficiency etc. This is similar to big companies like Microsoft changing an internal carbon tax to redirect investment).

by allenz 9y ago

fulafel 9y ago

Incidentally, this is close to how it works (at least around my part of the world) when you as a residential customer choose to buy solar/wind generated electricity. The retail electricity providers sell you electricity from a spot market (see https://en.wikipedia.org/wiki/Electricity_market#Wholesale_electricity_markets https://en.wikipedia.org/wiki/Electricity_market#Wholesale_e...) and you pay the local power comapny to send you the electricity over the national grid. BTW there's a big difference here between GW (power) and energy - do they contract 3 GW 24/7 or are they buying 24*3 GWh per day whenever the spot prices are lowest, or are they paying companies to average 3 GW per day over a multi year contract? In the first scenario there will be surplus over 3GW for most of the day.

allenz 9y ago
3 GW measures average power. Google just buys the entire output of wind or solar farms, so supply is not matched with demand.[1] This is a known problem with renewables. Elon Musk claims that he can solve it with a relatively small area of batteries like the Powerpack, but he's sold less than 1 GW so far because batteries are expensive. [1] https://environment.google/projects/announcement-100/ https://environment.google/projects/announcement-100/
- fulafel 9y ago
  I guess that accounting is natural for marketing numbers. I don't generally think it's a problem, it's just a feature of those generation methods and just means we need overprovisioning. Whereas fossil fuels have unsurmountable problems and cause untold human suffering, famines and damage to the environment.
  - allenz 9y ago
    I think that Google has made a fantastic step forward. However, solar and wind require some form of energy storage, such as pumped hydro or batteries (which Google hasn't addressed). Overprovisioning by itself isn't sufficient.

ZeroGravitas 9y ago

A more important caveat is that it's only talking about their electricity usage, presumably people still drive to work in ICE cars, fly airplanes, ship devices around the world, the accounting for even just electricity usage can extend out to suppliers and suppliers of suppliers etc. But it's still a very good thing and others should follow suit. Also, can you show your working for them "selling at a loss". They generate renewable energy then sell the energy and keep the certificates that say it's renewable, those are both worth something. Are you saying they could have bought the certificates on the open market for less, because I don't think that's the case.

allenz 9y ago
Google's report from 2013, cited from their blog, says that they resell electricity at a "slight net loss".[1] I didn't compare to buying RECs. The point is that Google is 100% renewable voluntarily. While RECs may be worth some tax credits, it's obviously a net cost or else Facebook would also be 100% renewable. That said, I'm fairly confident that Google's approach is more costly than just buying RECs because demand for RECs is not very high. Google doesn't buy RECs directly because they want stronger guarantees of additionality: "Buying a few years’ worth of RECs from a renewable project does not provide the stable and sizable cash stream that a renewable project developer needs to get financing to build new green power projects. In a PPA [power purchasing agreement], Google is agreeing to buy all the power from a project for many years. Google has, in effect, totally accepted the power price risk that the project owner would otherwise face—instead of taking the risk of selling into the power market on a short-term basis, Google is providing the seller with a guaranteed revenue stream for 20 years. This is something the developer can literally take to the bank. If we were to buy only the RECs, this would represent a fraction of the value of a typical power project,5 and would still leave the renewable developer to face the market risks of future energy prices, making it much harder for them to obtain financing for projects. [1] http://static.googleusercontent.com/external_content/untrusted_dlcp/cfz.cc/en/us/green/pdfs/renewable-energy.pdf http://static.googleusercontent.com/external_content/untrust...

cosmic_ape 9y ago

Can anyone explain this: If all they do is buy and sell electricity from renewable sources, while using the regular grid to actually power the data-centers, then why do they do it at all? Is it a form of philanthropy?

ZeroGravitas 9y ago
Even if they were powering their data-centers directly from renewable sources, bypassing the grid, it would still be a form of philanthropy to whatever degree it raises their cost beyond burning coal and dumping the pollution on someone else. Since global warming is a global problem (and other forms of pollution from burning coal or gas can travel long distances) it doesn't matter where the carbon is saved, it's basically equivalent, so they're just being pragmatic in their philanthropy. This could be thought of as a subset of their wider goal to be carbon neutral (which again, could be described as philanthropic in nature), presumably funding the roll out of renewable energy seemed like a cost effective way to work towards that goal.
- cdancette 9y ago
  I don't get why this is the same thing : if every company is doing this, every company is still powered by fossil fuels, and just producing renewable energy that won't be used anywhere. Edit: as the energy they buy is sent into the grid, if all companies do this, the renewable energy can be sufficient to power all companies, so I guess that makes sense
  - ZeroGravitas 9y ago
    There is some cost to integrating renewables into the grid, though most experts seem to suggest the first 80% or so isn't that hard, and we're so far away from that in most places that the positive externalities massively outweigh any negative. If people did use this model to get to 100% then presumably the final 20% or so would be more expensive, since you'd still be paying grid prices for your usage, then selling the same amount of renewable power to try to cancel out that cost. If that renewable power is worth much less, because of integration costs, then you'll be paying much higher costs overall. (Note, paying much higher costs is a good thing, since it gives a market incentive for people to invest in storage technologies, demand/response, efficiency etc. This is similar to big companies like Microsoft changing an internal carbon tax to redirect investment).