Google Phases Out Clean Energy R&D in Favor of Deployment, Citing the “Compelling” Cost Reductions in Solar PV

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"Google Phases Out Clean Energy R&D in Favor of Deployment, Citing the “Compelling” Cost Reductions in Solar PV"

Media incorrectly report Google is abandoning renewables. In fact, the company is increasing clean energy investments.

Buried at the bottom of an innocuous “spring cleaning” post on Google’s blog yesterday, the internet giant made a very important announcement: it will stop funding its Renewable Energy Cheaper than Coal (RE<C) initiative.

But that’s not the whole story. And if you believe the headlines — “Google Abandons Renewable Energy Push” or “Are Google’s Green Days Over?” — you might think this is a negative development. But if you look at the details, it’s a story about how the company is adapting to a changing market and actually increasing investments in renewables.

Announced in 2007 by Google, RE<C was focused on driving down the cost of renewable electricity (mostly solar and geothermal) to meet the cost of generating electricity from coal. The initiative funded R&D in capital-intensive, early-stage technologies that would enable cheaper Enhanced Geothermal Systems and Concentrating Solar Power projects.

But Google says it’s now shifting its focus to project financing rather than R&D, citing the need for more sophisticated research on CSP technologies beyond Google’s scope, and the rapidly changing economics of solar PV:

Over the last few years, we’ve seen a lot of progress in clean energy. We’re excited that some technologies are so quickly approaching cost competitiveness with traditional forms of energy in parts of the US and the world. Power tower technology has come a long way, too. But the installed cost of solar photovoltaic technology has declined dramatically over the past few years, making solar photovoltaic technology a compelling choice for consumers.

At this point, other institutions are better positioned than Google to take this research to the next level. So we’ve published our results to help others in the field continue to advance the state of power tower technology, and we’ve closed our efforts. We will continue our work to generate cleaner, more efficient energy—including our on-campus efforts, procuring renewable energy for our data centers, making our data centers even more efficient and investing more than $850 million in renewable energy technologies.

Although the news was hidden at the bottom of a blog post, this is a pretty important announcement. (Only at Google would they casually “spring clean” millions of dollars in R&D investments for renewable energy).

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Firstly, it shows how capital intensive many of these technologies are. Google invested tens of millions of dollars into R&D for new methods of building CSP plants. Today, we’ve got a number of commercial projects deployed using some of the technologies and methods funded by Google — but even after investing all that money, much of the research is still in the early phases, the company says.

The same goes for Google’s funding of Potter Drilling, a company working on developing a technique for drilling through deep, hard rock called “thermal spallation.” The drill is designed for Enhanced Geothermal projects. Potter has been working on the technique since 2004, with Google investing over $10 million in the company through its RE<C initiative in 2008. But like most development in the EGS sector, progress has been slow and the drill has not been commercialized yet.

Google’s shift away from these projects doesn’t prove whether or not they’ll be successful. It just shows how much money and time goes into bringing new energy technologies to scale.

Meanwhile, the stunning changes in the economics of solar PV have made market conditions far different today than in 2007. Google has since invested more than $350 million into the deployment of distributed solar, investing in SolarCity and Clean Power Finance, and a variety of projects in Germany. (Google also threw $168 million behind the Ivahpah CSP project, showing that it still has a lot of confidence in that technology too).

Wind is a major part of the company’s portfolio as well. It has invested over $250 million in wind projects around the country, including the world’s largest wind farm, an 845 MW project in Oregon.

You can find Google’s full range of investments, totaling $850 million, here.

Even while dropping its high-profile RE<C initiative, Google is investing more than ever in renewables. But it’s choosing deployment over R&D — showing once again that much of the progress in climate solutions will come from actually developing projects.

Research is an extraordinarily important part of building new technologies and making us more competitive. We should never lose sight of that. But we should also recognize the dominant strategy of the largest companies in the world working to bring down the cost of renewables: Deployment, deployment, deployment.

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14 Responses to Google Phases Out Clean Energy R&D in Favor of Deployment, Citing the “Compelling” Cost Reductions in Solar PV

  1. Mark Shapiro says:

    Google has deployed both PV and fuel cells. Both PV and fuel cells produce direct current, and direct current powers every single computer on the planet.

    Power loss from resistance is higher at low voltages, but over short distances this is minor. When will Google’s famed engineers show us how to power our electronics directly, cleanly, efficiently, and cheaply with PV?

    At $1/Watt, PV panels should be on every data center roof, pumping clean power directly to the servers. Fuel cells can provide the balance, and you can use the grid as a third-string backup!

  2. Paul Magnus says:

    The Vancouver Sun
    A new report suggests that a handful of multinationals are spending billions to deflate action on climate change:

    Heres why….

    Corporations spending billions to exert ‘undue influence’ to prevent global climate action: report
    http://www.vancouversun.com
    A handful of multinational corporations are “exerting undue influence” on the political process in Canada, the U.S. and other key nations to delay international action on climate change, alleges a new report released Tuesday by Greenpeace International.

  3. Dave Huntsman says:

    Google is one of the richest corporations on Earth. Yet, even they are pulling out of the true Research and Development business and going for quicker, more assured near-term profit with things others have already developed. They leave absolutely needed R&D to ‘other institutions’- mainly, the government. But government R&D is being reduced, since Republicans say any needed R&D will be done by corporations…..

    If the richest companies in the world won’t fund R&D – who will?

    • Tim says:

      I think the point is that as a big photovoltaic and wind power customer, Google is funding R&D in the same way that computer buyers are funding Intel R&D. We all buy computer chips that have technology that is “already developed”, but that hasn’t prevented Intel from have one the highest ratios of R&D expenditures to revenue of any company in the world for decades.

    • Don Lindsay says:

      Large industries do their own research. They improve their products, to gain competitive advantage.

      The crossover point happened a long time ago, when the PV industry got to about one billion dollars a year. Prior to that, effectively the industry couldn’t afford a meaningful amount of R&D. Now, they can. The crossover happened years ago, so the recent price declines are a happy confirmation that the industry is viable. Let’s keep it that way.

  4. Artful Dodger says:

    Somebody at Google must follow Climate Progress. Joe, you’re too modest to include a ‘Related Articles’ section in this post.

    But it’s your mantra, ‘Deploy, Deploy, Deploy’ that we see in effect here. Well done!

  5. perceptiventity says:

    Was recently driving through Germany – solar PV modules on many a barn yard structures. New Wind towers buing built

  6. fj says:

    seems shockingly encouraging!

  7. AndrewW says:

    To just replace coal-generated electricity in the US with wind+solar would require 300 million acres of land (all the land we currently use for farming) and $25 trillion.

    We don’t have either of those.

    The solution isn’t wind and solar. Deploy all you want, demand has exceeded all wind and solar by 300% in the last year. It’s not a solution.

  8. Doug says:

    Andrew, your ‘facts’ are not correct.

    – U.S. Land Area: 9.1×1012 sq. meters (incl. Alaska)

    – Average Insolation over the entire continental US: 200 W/m2 (this number already takes into account the intermittency of solar due to day/night and variable cloud cover)

    – 1999 U.S. Electricity Consumption = 0.4 TW

    Hence:

    0.4 TW/(200 W/m2 x 10% PV efficiency) = 0.22% of land area, or about 4 million acres. Not 300 million as you claim – you are off by about a factor of 100.

    Further, assuming an installed cost of $3 per watt (and not accounting for any price reductions due to the market effects of such bulk deployment), the total cost for 0.4 TW of PV is $1.2 trillion – not $25 trillion. Big difference.