By the end of this year, Google will be powered entirely by renewable energy
Google's entire operation — including all data centres and offices for its 60,000 employees — will be powered by renewable energy by the end of 2017.
Michael Terrell, Google's head of energy policy, says the move has been part of the company's long-term strategy for years. But as he tells Day 6 host Brent Bambury, they had no idea how they would get there.
"It was a moonshot as far as we were concerned. We had no idea how we would get to the finish line and we had no idea how long it would take," he says.
Terrell has been at Google since 2007 — the year the company set its first goal to become carbon neutral. He has been helping the ever-growing tech giant rein in its energy costs ever since.
It's extraordinary that we've been able to reach this point as fast as we have.- Michael Terrell
Google was one of the first corporations to create large-scale, long-term contracts to buy renewable energy.
Their first agreement, signed in 2010, was to purchase all the electricity from a 114-megawatt wind farm in Iowa.
"We use about 5.7TWh [terawatt hours], which is about as much as San Francisco uses in a year," Terrell says. "It's extraordinary that we've been able to reach this point as fast as we have."
Google makes the leap
Last year, Google sourced less than half of its power — 44 per cent — from wind and solar farms.
The leap to 100 per cent reliance on renewable energy is a testament to the company's drive; it's also closely tied to a changing global market.
Terrell says his company's progress shows how quickly the renewables market is scaling around the globe.
"We focused on renewables, because that's what's available right now. We can go to a wind developer or a solar developer and sign a deal for a project now," he says.
And that's exactly what they've done. Terrell and Google went on a renewable energy purchasing binge.
According to Terrell, the costs of wind and solar have fallen by 60 per cent and 80 per cent respectively in the past six years. Google now buys energy from 20 renewable projects around the world, including sites in Sweden, the Netherlands, and Chile.
"When you look at the end of 2017, and you total up all the electricity our organizations consume all around the globe, the amount of renewable energy that we purchase will match that number."
The business case for renewable energy
Google won't literally just be using energy generated from wind and solar farms; the nature of national grid infrastructures prevents that. Instead, it will be paying for enough units to account for its usage in a carbon-offsetting programme.
Emissions associated with electricity made up the largest share of Google's carbon footprint. Terrell says reducing that footprint was the main reason for rethinking their energy policy — but they also found that making big bets in renewable energy actually makes a lot of business sense.
We use about 5.7TWh [terawatt hours], which is about as much as San Francisco uses in a year.- Michael Terrell, Google's head of energy policy
"The cost of renewable energy is competitive with what is already on the electricity grid, but the costs for renewables keeps coming down," he says. "It's becoming cost-competitive in a growing number of places."
Terrell also says contracts with a fixed price are beneficial when managing such a large, global energy portfolio because they're protected from the price swings that you see with oil and other fuels.
"We certainly plan to maintain the 100% goal that we've set," Terrell says, who adds that Google has set it sights on an even loftier goal.
The internet giant was already the world's biggest corporate buyer of renewable electricity when it was at 44 per cent. Now, Google is truly in a league of its own.
But as Terrell points out, the work accomplished by his team proves that operating solely on renewable energy can — and should — be done.
"It's very much a friendly competition, but the more that companies get involved in the space, the more it helps take the market to scale, and that benefits everybody and the planet," he says.
"When you're looking to solve this problem long-term, we realize that we should look at all technologies and everything should be on the table.
To hear Brent Bambury's conversation with Michael Terrell, Google's head of energy policy, download our podcast or click the 'Listen' button at the top of this page.