http://www.care2.com/causes/global-warming/blog/does-google-know-something-about-energy-that-the-rest-of-us-dont/Google announced a large wind energy deal this week that reveals a lot about where they think energy markets are headed. Other big energy consumers should take notice.
Rather than simply buying renewable energy credits (RECs) and adding some solar panels to show their commitment to green, Google’s energy subsidiary signed a 20-year power purchase agreement with NextEra Energy. Google will begin buying 114 megawatts of electricity from an Iowa wind farm later this summer. Now of course Google doesn’t consume much of their energy anywhere near Iowa, but they can (and intend to) sell this energy on wholesale markets, and simultaneously buy energy where they do use it.
By buying the wind energy directly, Google has created a giant hedge against both rising energy prices and the future cost of compliance with emissions reduction mandates – either voluntary or mandatory. RECs are a way to separate out the actual energy from the credit for low emissions, and this direct investment locks in their costs for both.
Why would they want to do this? Aside from their intention on greening their operations, they believe it makes good business sense.
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