December 16th 2009 saw internet search engine giant Google advance towards taking a big stake in the seemingly ever-burgeoning energy business sector with its formation of the Google Energy subsidiary. Parallel to the founding of the subsidiary, it also put in a request in conjunction with a federal agency to enter the wholesale market in order to both buy and sell electricity.

Analysts postulate that rather than signaling a change away from Google’s central business concern of internet searching, the decision has been taken with the intention of providing Google with much increased flexibility in terms of meeting its core corporate commitment of carbon neutrality. Google representatives also confirmed this view in recent statements. Google with its new venture is looking to produce high quality, affordable renewable energy with the aim if using green credits sponsored by many governments around the world. As an example of this, Google currently has a substantially-sized 1.6 MW solar facility at its corporate headquarters in Mountain View, California that it utilizes for offsetting its energy consumption needs and assist it with following through on its primary green movement.

The difference between previous alternative energy investments and the overall Google Energy strategy and its aim to buy and sell electricity in the same manner that utilities companies do, though, will afford Google considerably more flexibility in terms of utilizing greater amounts of renewable energy to offset its overall operational energy consumption. Google spokesmen have stated that, currently, there are no firm plans for Google energy and its development in the future, though it is an important foundation for their current thinking and will be used as a springboard for a number of energy projects worldwide.

The main idea behind Google Energy seems to be for the company to be able to improve its operational efficiency — especially with regard to its data center that utilizes substantial amounts of energy to maintain information flows on a regular basis — in order to establish itself as a carbon-neutral company. Google Energy also has a program to acquire what they refer to as “high-quality carbon off-sets” and Google’s philanthropic arm, Google.org, has been investing substantially in renewable energy companies to the same aim. Indeed, Google.org has invested in and bankrolled start-ups in wind, solar and enhanced geothermal energy companies throughout many countries.

The company is also actively looking into areas where IT can meet energy needs; for example, the possibility of using networked electric car batteries in order to keep grid frequency stable. Google has also joined together with General Electric in order to campaign for more policies promoting clean energy. This mirrors Google’s activities of the past two years, during which time Google has been strenuously advancing the cause of clean, green energy in many different ways without getting directly involved with the business side of things itself in the way a utility company would be.

Industry analysts believe that this move will afford Google an excellent opportunity to learn about the business in a way that would otherwise have been impossible and will also afford Google the opportunity to pursue its partnership with Energy Inc., a privately held company, in order to deliver free energy management software to households, thereby circumnavigating the smart meters of utility companies and possibly even boosting energy efficiency.

One such smart meter currently in use is a web tool called the PowerMeter, and it allows customers to monitor the amount of electricity they use at home. In a smart piece of business practice, customers opting to use the Power Meter originally needed their utility company to install the hardware at their home. Google’s partnership with Energy Inc. now renders this obsolete, as customers are now able to purchase Energy Inc’s power consumption measuring device known as the TED 500 without requiring the installation of a smart meter – and they can also use Google’s software on top. The system itself costs roughly $200.

Currently, despite moves by an increasing number of utilities to install smart meters, they still make up a relatively small portion of all the electricity meters in the US. Despite its mutual utility Google Energy described the partnership with Energy Inc. as “non-exclusive”, and it does not include financial terms. Indeed, Google’s cooperation with other energy companies will continue unabated – such as its partnerships with Electric and Germany’s Yello Strom and Sempra Energy’s San Diego Gas. This has been done in the hopes to give a much more comprehensive service to individuals around the world as well as help reduce energy consumption on a global scale rather than in purely local markets.

Google Energy is currently also involved in projects investigating ways in which software can be written in order to connect plug-in hybrid cars to city power grids as well as a special mirror technology with plans to bring down the cost of solar thermal plant construction by at least a quarter. This investment and focus on solar thermal power generation rather than purely traditional photovoltic cells (the standard solar cells used to convert sunlight into energy) will help improve solar energy conversion rates while reducing the overall costs, making solar thermal plants a much more viable alternative energy source than they currently are.

While currently most Google Energy projects are limited in scale and global application due to the relative newness of the program it can be expected to play a much more active role in the energy market throughout the year. This will especially be the case as it moves further into solidifying its position in a number of different global markets as the world economy begins to recover, allowing for even more diversification by the main company into different business sectors in order to fully utilize its resources and partnerships with other major companies. Look for further news on more Google Energy developments in coming months as it continues to develop and bring about further changes and offerings to the domestic marketplace with potential major developments being announced as early as first or second quarter 2010.

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