Google to Tackle Renewable Energy

Nov.28.07 | About: Alphabet Inc. (GOOG)

Internet search behemoth Google Inc. announced Tuesday it is entering the field of renewable energy to find a technology that is less expensive than coal. Coal accounts for half of U.S. power and is a primary culprit in carbon emissions. Google plans to invest hundreds of millions in a research group that will explore alternative energies like solar, geothermal and wind power. The project is called Renewable Energy: Cheaper Than Coal, written using the mathematical notation RE<C. The company is motivated by its own need to cut energy costs as well as a desire to fight climate change and wean the U.S. off fossil fuels. "We're a large consumer of energy due to our data centers, so we're a natural customer," said Google co-founder Larry Page. "We see opportunities to make significant investments that generate positive returns." Google's philanthropic arm,, will supplement the activities of the research group by providing grants to institutions and labs working on similar projects. The object is to create a gigawatt of renewable energy for less than the cost of coal within "years, not decades," Page said. "If Google is consuming between 3,000 to 5,000 megawatts of energy, they might be one of the largest consumers of energy," said Oppenheimer analyst Sandeep Aggarwal. "If they can figure out how to save money in their energy consumption, this sounds like a positive to me." Other analysts are less convinced. "What the heck are they doing? It boggles the mind," said Jordan Rohan of RBC Capital Markets. "The company is blessed with the best business model on the Internet. This makes me worry about Google's priorities."

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