Google invests $75M in a 50MW wind farm, total $1B to renewable energy sector | Hacker News Reader

Google invests $75M in a 50MW wind farm, total $1B to renewable energy sector

thenextweb.com

65 pointstchalla41 comments

Just so everyone's clear, the reason that Google (along with Chevron, Wells Fargo, and a number of other big companies with large tax liabilities) are investing in renewable energy is to take advantage of the massive tax credits that come with the investment. There simply aren't that many companies with tax liabilities large enough to make investments in tax equity like this attractive, and Google is one of them.

So, good for Google. It makes a lot of sense for them to do this and I'm glad to see it happening.

Thank goodness for beneficial tax policies that encourage investment in future technologies!

How do we know whether or not a technology is a "future technology" if it is unprofitable without tax credits? Would car companies have spent millions of engineering hours on hydrogen vehicles if the government didn't pay them to do so in the 00's? Maybe it would have been better for mankind if they didn't.

Broad incentives are better than targeted incentives. The government is bad at picking future technologies. See ethanol.

1) Renewable energy is a pretty broad target.

2) Countering ethanol - see the internet.

The goverment invented ARPANET in 1969.

IBM and ATT had major labs and were vitally interested in computers talking to one another as early as the late 1950s and early 1960s. Bell Labs invented UNIX in 1969; it made the internet possible. IBM invented FORTRAN and hard drives in 1956. Bell transmitted packet data over lines in 1958. Texas Instruments invented integrated circuits in 1958. In 1961 Leonard Kleinrock published a paper on packet switching networks. Bell Labs made the first modem in 1961. Digital Equipment Corporation produced the first minicomputer in 1964. In 1965 time sharing at MIT and mail command started. Intel began in 1968. The year 1966 saw the first use of fiber optics to carry telephone signals.

Yes, the RAND corporation came up with a design for a decentralized network that could continue to communicate in case of a nuclear attack. However, they did not invent all of the technology that makes the internet possible.

Also, this is an example of the broken window fallacy. http://en.wikipedia.org/wiki/Parable_of_the_broken_window

We can't see what type of internet the market would have made because the resources taken out of private market and given to the defense department.

> How do we know whether or not a technology is a "future technology" if it is unprofitable without tax credits?

Is profitability the only factor that makes a technology worth pursing in "the future"?

I assume he means economic profitability, in the which case factors such as the utility of future generations is included.

In a world we(or at least I) live in, yes.

Not that I have any say over it though...

No, people have many reasons for pursuing technology. The question is whether the government should encourage people to pour money into unprofitable forms of energy.

Except wind energy has no practical future promise.

I disagree with the sentiment. Wind energy has been enormously beneficial at pumping water for a few millenia now.

Is that actually true? Seems like growth-focused tech companies with comparatively low earnings per revenue would have low tax liabilities, especially when compared to stable industries like oil and banking.

For the nine months ending 2012-09-30, they paid USD 1.6bn in cash in taxes. (from Google Finance.)

Well, taxes are surely one big reason, but not the only reason. Bloomberg invests in renewable energy because it is the personal view of the majority shareholder that we should be doing it.[1] We get 58% of our energy from wind power and offset an additional 25% by purchasing GREEN-E certified biomass certificates (RECs).

[1]: http://www.bloomberg.com/news/2012-11-01/a-vote-for-a-presid...

NB: buying green power and / or RECs is _very_ different from investing directly into a renewable energy development.

I would agree with your larger point that there are other (non-financial) sources of return to these investments.

Yes, I agree.. not to say that there isn't direct investment as well, but at a much smaller scale. We built solar farms to power our offices in NJ (50% @ 1.8MW[1]) and San Francisco, but those direct investments only account for 1% of worldwide power usage.

[1]: http://blog.bloomberg.com/2012-03-14/bloombergs-princeton-of...

First, a 50MW farm is only ~25 turbines which is small for industry standards. I have been on top of wind turbines in farms of hundreds of turbines surrounded by other windfarms of the same size. I use to inspect wind turbine blades using Industrial Rope Access.

Second, Google benefits a few ways with this and other renewable investments, mainly for the Production Tax Credit or PTC. A federal incentive program to develop the wind energy industry that is equivalent to $02.2 per kWh of production. A 50MW farm running at 30% will produce ~130M kWh per year or $3M/year in PTC.

Google is doing three things at once, reducing their tax liability, diversifying their portfolio and advertising the Google Brand. This has nothing to do with powering their own data centers and might even take the focus off of them using dirty energy to power their data centers.

I don't understand the last clause. Yes, Google uses "dirty energy" in many data centers because they're connected to grids without direct "clean energy" feeds. But electricity is near-perfectly fungible. If you care about "clean" energy at all, your goal should be increasing the supply anywhere -- what's the difference to an environmentalist if that 50MW goes to a Google-owned data center or just a local housing development? How does it make it "less good" of Google to have built those turbines?

Electricity isn't very fungible at all, at least across space and time: It is expensive to transport and almost impossible to store. The limiting resource on power production is facilities, not fuel.

Any electrical power source that doesn't displace a power plant is a toy.

No, that's a very commonly stated point, and it's completely wrong from the perspective of someone trying to reduce carbon output.

Solar usually gets this criticism more than wind, so let's use that: the argument goes that you need enough power generating capacity to handle peak usage, but of course solar only works in the day. So if your peak usage happens at night (it doesn't, but let's assume) then the solar panels have "displaced zero power plants".

But who cares? If you have them built, then during the day the solar plants are operating and generating (much cheaper, looking only at marginal costs) power. And the coal and gas plants, by virtue of having higher marginal costs, are idle. And at night the fossil plants fire back up and do what they were doing before. So the net effect, assuming excess solar capacity, is that carbon output has been reduced by a factor of two (actually a bit more than two in practice).

And of course then the market will accomodate, such that "day power" being available in higher quantity and with higher excess capacity becomes cheaper and "night power" more expensive. So the legacy coal plants will probably still even make money as they're selling into a "premium" market.

So... how is solar (or wind) a toy in that scenario?

There is an interesting factoid that hasn't popped out of this discussion, Google is a power company [1]. They did this for a number of reasons, but one of the benefits is that they get to play in the slush pond of kilowatts. Energy companies 'trade' energy (because as ajross points out it is sometimes in the wrong place at the wrong time) kind of like Internet providers 'trade' bandwidth. As licensed energy provider Google and trade wind kilowatts in Iowa for coal kilowatts in Georgia. Its a great way to 'hack' the fact that transmission costs and land costs make it hard to build renewables near your data center.

[1] http://www.bloomberg.com/apps/news?pid=conewsstory&tkr=E...

Yes, the wind farm outside Indianapolis must be several hundreds of turbines. Possibly into the thousands, it goes on for many miles in all directions. I've driven through it several times and it always creeps me out, the most alien thing I've experienced.

Usually, and this is not always the case, many different developers build side by side with each other. You can tell by looking at the nacelle and blades of the turbine to see the variations in design.

I was on a turbine in West Texas and all I could see was wind turbines as far as the eye could see to the horizon.

50MW seems pretty significant. if Wikipedia is to be believed, "According to Google their global data center operation electrical power ranges between 500 and 681 megawatts"

MW is the wrong unit to use for that comparision. TWh/year is more appropriate.

Out of curiosity, why do people use Watt-hours instead of Joules for this purpose?

Which is more practical?

A: "Hi, can you please supply us with 50MW for the next 12 hours?"

B: "Hi, can you please supply us with 2.16Tj at a rate of 50MW?"

It would be much nicer to get 2.16Tj in a bucket.

Tradition. Same reason we use centralized banks and sovereign currency instead of bit-coin and other independent currencies, or miles per gallon instead of gallons per mile.

Or for that matter, kilometres per litre.

Joules (or watts) is a measure of capacity. Electricity generating capacity, especially with intermittent sources like wind is almost meaningless. Who cares about capacity if the actual generation is zero.

Watt-hours, Megawatt-hours, and terawatt-hours are used because that's the descriptive term of energy actually produced.

I think MW is a reasonable unit. It's the power output of the wind farm.

No. MW-hours is the reasonable unit of power output. MW is a description of the capacity, but it says nothing of actual generation.

I understand the number is an ideal, maximum number, but I'm talking about the units. Are you saying power should be reported in megawatt-hours per year? That might be convenient, but it's the same as megawatt-years per year, which reduces to megawatts which is what I said.

MW tells us the scale of the plant. TWh/year tells us the production of the plant.

I've got a good gut sense for what a 3 MW wind turbine looks like, so when I read "50 MW Plant" - I can already envision about how large, and about how many turbines it will have (approx 15-30).

TWh/year doesn't tell me as much, because the plant might be located in a very windy place. Or maybe not in a windy place at all - the data is still useful, but I prefer MW when people are talking about a plant's "physicality".

It's less significant if you consider that the Capacity Factor of a wind farm is around 20-40% (wikipedia).

That comes out to more than 3 dollars per watt.

You say that as though it's a lot. And it sort of is a lot for an initial investment. But the cost of keeping a wind farm running is a lot lower than the cost of keeping fuel consuming power plants running. This wikipedia page has a bunch of estimates of overall cost per Megawatt Hour that show wind being a slightly cheaper source of energy than conventional coal plants, and considerably cheaper than more advanced coal plants.

http://en.wikipedia.org/wiki/Cost_of_electricity_by_source

Wind farms, as with solar farms and nuclear energy, have large up-front fixed costs and negligible marginal production costs. If the wind-farm produced _only_ 1 hours worth of energy, then $3.00 per watt would be spot on, as I understand it.

Likely the wind-farm will operate a number of years. Let's suppose it produces at 10% capacity for 20 years. That would be equivalent to 100% capacity for 2 years, which would be 50 MW/h * 24 hour/days * 365 days/year * 2 years = 876,000 MW/h

So now you have $50 Mill/ 876,000 = $57.08 per MW/h, or $5.7088*10^-5 cents per watt/hour.

Now, suppose the capacity is larger or the time lasts longer. The cents continue to fall per watt/hour

Ach, just realized they invested $75 Million, not $50 Million. Scale up by 50% :D

Don't forget about their $5B transmission line as well:

http://www.guardian.co.uk/environment/2012/may/15/energy-win...

http://gigaom.com/cleantech/by-the-numbers-googles-offshore-...

This makes me wonder how long a game Google is playing. And how good they are at playing the long game.

Does anybody know how well they did on all that dark fiber they were buying up after Bubble 1.0?

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