The Overlooked Piece To Google’s Energy Plan
Unlocking the synergy between Google and clean energy developers
Over the years, Google has built strong relationships with clean energy developers through its innovative energy procurement. Building on those relationships, it could now boost its cloud platform business while driving down the costs of clean energy. Beyond demonstrating how to reach 100% carbon-free electricity consumption, Google can provide the tools enabling the energy industry to produce this goal. Here’s how.
Building Data Tools For Developers
Clean energy developers are big data companies, but most of them don’t know this yet; their tools certainly don’t. Most developers I know manage their files through email and analyze data through a web of spreadsheets that would impress even Charlotte. As development portfolios scale up to tackle climate change in earnest, this method of data management quickly fails. I’ve witnessed firsthand the burying of project profit due to poor data management. Conversely, I’ve seen project economics pulled from the grave due to data-driven insights.
Meanwhile, Google is actively trying to drive in new customers to its Google Cloud Platform. Offering an effective file management system provides clear-cut value to developers, but facing stiff competition from other cloud providers, Google needs tools that set them apart. By developing energy-specific data software, Google can increase its revenue while decreasing its electricity costs.
Most developers analyze their data through a web of spreadsheets that would impress even Charlotte.
I don’t simply mean analyzing operating power plants or evaluating electricity markets. The world of project development is stuffed with unorganized data, just begging to be mined and analyzed, particularly by tools that Google has already developed. Google’s Vision AI can parse engineering reports, legal documents, and satellite imagery. Google’s Earth Engine can power innovative GIS products central to development, like layout software and site feasibility tools. Google Translate can provide much needed support to international developments. The sky is the limit.
Proper data engineering enables dashboards that show insights across a developer’s portfolio of projects, both operating and in development. While most engineering insights remain siloed to a single project now, a centralized data platform would improve insights for every project with each new study. Developers don’t have the resources to build the data lake required to serve this purpose, but Google could offer this functionality as part of its cloud platform.
Traditional energy software needs a face-lift. Open-source libraries exist to replace archaic tools like PVSyst or Windographer but need a well-designed user interface to do this. I don’t know a single engineer that would hesitate to adopt a Google-sponsored replacement for these programs.
Google is uniquely suited to build these products. Much of their current software lays the foundation for these services; they just need to be tailored to the energy industry. Ideally, Google would open-source all these projects, as they are vital in the fight to decarbonize the grid. As a consumer of over 12 TWh of electricity, Google clearly values the reduction in clean energy costs on their own. However, using these tools to bring in Google Cloud Platform customers amplifies their value.
Improving Project Evaluation
For the last 4 years, I have cussed out RFPs, and Google wasn’t exempt from this verbal abuse. (By RFP I mean a Request For Proposal of clean energy projects that can be evaluated by a company looking to purchase carbon-free electricity.) Responding to an RFP meant pulling together mountains of information that would likely never get read and would certainly change. Demands from RFPs have included exact production from a wind farm at noon on July 4th, 2037, or the technical specifications of a solar panel model that doesn’t even exist yet. Beyond my own frustration providing “fake data”, serious reasons abound for RFP solicitors to take a deeper look into this process.
Evaluating projects submitted into an RFP by different developers fits the proverbial comparison of apples to oranges. A developer must select many different variables when modeling a project, such as the weather resource, construction estimates, and technology deployed. These variables can be cherry-picked to manipulate project performance. Two energy estimates for a project, both using valid, but different, industry assumptions could easily yield a 5% difference in annual energy. This problem gets even more extreme at the granular level that Google now measures projects. To truly pick the best project, Google must reduce this variability across project models.
Due to traditionally cloudy RFP evaluation criteria, developers bid many different projects (and many iterations of the same project), hoping the spectrum of options illuminates one ideal project for the RFP solicitor. This beast of submissions burdens both the developers and the RFP solicitors, further exacerbating the inconsistencies across project evaluations. It also draws out timelines forcing unique constraints and higher costs across all projects in development.
Google is poised to solve these problems. They can build a project assessment platform that incorporates developer-provided data into consistent models. Baseline assumptions and methodologies won’t vary across projects, but if more accurate data exists, it will be incorporated to reduce project uncertainty. Using their new rubric for carbon-free project evaluation, Google could clearly rank projects on coherent criteria, and the transparent guidelines will help developers prioritize which projects to submit.
Building strategic tools into the platform can reduce the development costs of the projects, decreasing the final electricity price. GIS maps could help developers target ideal development locations for Google and allow them to effectively prioritize current developments. This reduces expenses across the development portfolio by increasing project success rates. Taken further, the platform could become a hub where developers maintain information on all their projects and Google selects among them on a rolling basis. It could even be marketed to other members of the Renewable Energy Buyers Alliance, further reducing RFP-related costs in electricity pricing throughout the industry.
Joint Project Development
The synergy can move beyond a customer-merchant relationship, especially internationally. When Google looks to site its next data center, it should leverage strategic partnerships with clean energy developers active in the region. Since both companies are looking to develop new facilities, they may be able to combine studies and split development expenses. They can work together to improve local permitting requirements and tax policies. Splitting development risks both reduces Google’s capital expenses and leads to cheaper electricity prices during its operation.
Final Thoughts
I oversee the development of a platform providing many of these services in the energy access industry. Its impact has been remarkable. Minigrids are now being deployed faster than ever, with profits continuing to rise. If Google implemented the opportunities I’ve described, this same revolution would take place throughout the utility-scale energy industry, one of the most important industries of our time. With its cloud platform, abundance of AI-based APIs, and ambitious energy procurement goals, Google not only has the foundation needed to put these dreams into action, it has the incentive. Well before 2030, Google could profitably expand its relationship with clean energy developers from customer to supplier. While revealing the path to operating on 24/7 carbon-free electricity, they could also help pave the road to supply it.
