Google unveils its green dreams
Google Inc. has set perhaps its most ambitious goal yet by vowing to help end the world’s reliance on coal as an energy source.
The company unveiled a plan Tuesday to cut coal consumption by developing cheaper, renewable alternatives. Executives said Google’s for-profit philanthropic subsidiary would spend “hundreds of millions” of dollars on the initiative, called RE
The cost of running Google’s massive, electricity-sucking data centers was one motivation.
“It’s very hard to find options that aren’t coal-based or dirty technologies,” co-founder Sergey Brin said at a news conference. “We don’t feel good about being in that situation. . . . We want to make investments happen so there will be alternatives for us.”
The company’s data centers will become more energy intensive as Google pursues a plan to allow people to store their personal files on Google machines rather than on their personal computers, a move seen as a way to accelerate a shift to Web computing and step up competition with Microsoft Corp. Consumers would be able to access the files, such as documents or digital music, from different computers and mobile devices, according to the Wall Street Journal.
Google has taken steps to be environmentally friendly. Its Mountain View, Calif., headquarters draws about 30% of its electricity from one of the country’s largest solar power installations. The company recently reduced by half the amount of energy its data centers use and helped start an industry group devoted to reducing the power that PCs devour. Google is also experimenting with plug-in hybrid electric vehicles.
Co-founders Brin and Larry Page haven’t been shy about their belief that they can harness technology to save money and the planet. Their conviction that climate change is responsible for poverty in developing countries reflects the influence of former Vice President Al Gore, a Google adviser who won a Nobel Prize for his efforts to warn about the threats of global warming.
Google’s anti-coal initiative won some applause from energy experts. They called the plan modest, considering the magnitude of what Google sees as a problem: Coal generates about half of the country’s electricity.
“It’s a very good, positive step in the right direction,” said Stuart Dalton of the Electric Power Research Institute in Palo Alto. “But this is not the only answer.”
Severin Borenstein, director of the University of California Energy Institute, praised Google for “focusing on the technologies that have the best shot at success” -- among them solar and wind power.
Stock analysts questioned whether management could afford a diversion from its money-making tasks of organizing information and selling ads.
“It’s a good thing that Google’s core business is performing so well because this seems like a project that goes pretty far afield,” said Jordan Rohan, an RBC Capital Markets analyst.
Rohan said Tuesday’s announcement wasn’t surprising.
“This is an example of Google being Google,” the analyst said. “That said, there is well over $200 billion of market cap riding on Google’s ability to continue to exceed estimates. I would hope the management team would stay focused.”
Page said Google needed the latitude to explore new areas beyond Internet search and advertising “when they are strategic.”
Google.org., the philanthropic unit started in 2004, will tap its nearly $2 billion in stock to invest in alternative energy start-ups and Google will hire 20 to 30 engineers and energy experts, the company said.
The initial goal will be to produce 1 gigawatt of renewable energy -- enough to power a city the size of San Francisco -- more cheaply than coal-generated energy within five years, Google energy czar Bill Weihl said.
The main stumbling block: Even as renewable energy sources multiply and become cheaper, they are still far more costly than coal or crude oil.
Google is part of a growing movement among Fortune 500 companies to go green. Its strategy is seen as another boost for the so-called clean energy industry that is attracting greater interest and money amid energy costs and growing fears about climate change.
Google’s shares rose $7.57, or 1.1%, to $673.57.
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