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Google Power Technology

Google Applies To Become Energy Marketer 160

Posted by CmdrTaco
from the what-aren't-they-doing-now dept.
necro81 writes "Google consumes massive amounts of electrical energy to power its data centers across the country and world. Now it has created a subsidiary, Google Energy LLC, and applied (pdf) to the Federal Energy Regulatory Commission to become a utility-scale energy trader. Google's stated aim is to be able to purchase renewable energy directly from producers at bulk rates, pursuing its goal of becoming carbon neutral. It is likely that Google Energy would also permit Google's own renewable energy projects to sell their energy at more favorable rates. Google reportedly does not have plans to actively become an energy broker, a la Enron."
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Google Applies To Become Energy Marketer

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  • Uh huh. (Score:5, Insightful)

    by stonecypher (118140) <stonecypher@gmai[ ]om ['l.c' in gap]> on Friday January 08, 2010 @12:33PM (#30696022) Homepage Journal

    Google also didn't have plans to make an operating system, a phone, a phone os, an instant messenger, a usenet application or a social network.

    So yeah, this isn't Genron. Really.

  • by d474 (695126) on Friday January 08, 2010 @12:37PM (#30696084)
    ...about Google's "Smart Meter" [google.org] for your home. It seems like Google wants to know everything about everybody. The only difference between them and other entities that what this much information is that Google's gradually arriving to that goal.
  • by eldavojohn (898314) * <eldavojohn&gmail,com> on Friday January 08, 2010 @12:38PM (#30696114) Journal
    Short disclaimer, I'm not an economist so what follows is largely my own opinion and prediction.

    Google's stated aim is to be able to purchase renewable energy directly from producers at bulk rates, pursuing its goal of becoming carbon neutral.

    Some quick observations about Iowa. Back in 2008, we covered Microsoft and Google opening up half billion dollar server farms [slashdot.org] in this state because energy was supposedly cheaper there and tax incentives. Now, if you look at the year end totals [windpoweringamerica.gov] for Iowa's wind power capacity in MW you'll notice that through 2008 it jumped higher than any other year going from 1,273 to 2,791. It more than doubled. At the end of 2009 it was at 2,862 -- perhaps a result of the recession -- but also indicative of what's going on in the state. Put two and two together and I think it's obvious that wind power companies were looking to work with Google and were maybe even encouraged by Google.

    You know, I was really glad to see this sort of thing happen. It was something that Google could spend money doing that would boost shareholder value while at the same time incentivizing companies to invest billions in wind power in Iowa with a lengthy ten year or more plan to gain that money back before they start to turn serious profits. If Google gets these wind power plants up and running, ten years from now we the consumers might be enjoying a price war between wind power fields generating electricity on equipment that has been paid for and now just needs maintenance fees. Think about it, a whole infrastructure springing up on Google's promises and investor's dimes being slowly amortized back up to very profitable and freaking awesome for ma and pa corn grower. The economy would go nuts if you could alleviate energy costs for everyone. In addition to the slow and welcomed change, the industries that will be negatively affected (coal, gas, etc) by these price wars will have the time to realize and change or better yet invest in their own wind farms. If this model is proven successful, tornado alley could in fifty years become the new middle east and we'll be fighting wind wars over South Dakota and Kansas.

    Now, back to the story, this vertical integration strategy is awesome for the company but I don't like it for two reasons. 1) In my opinion it is a step down the path to a weak version of a monopoly and competition deterrent 2) If Google influences these companies too much or worse buys them out, we might never see a price war I mentioned above. These are distant fears and after the Ma Bell and Microsoft monopolies/anti-trusts/Sherman Act prosecutions, I trust the DoJ won't sit idly by if point one or two become uncomfortable truths.

    Google reportedly does not have plans to actively become an energy broker, a la Enron.

    That kind of reassures me.

    Overly optimistic? Of course. A little unrealistic? Well, a man can dream, can't he? A man can dream.

  • by ickleberry (864871) <web@pineapple.vg> on Friday January 08, 2010 @12:42PM (#30696158) Homepage
    Is a great way of increasing your control over society.

    If you want to take over the world you need people who rely on you not only for internet search but more basic things like energy, food, communications (like all the fibre optic cables Google controls)

    Right now if google went away I'd just go back to using yahoo for search, my life won't change much but if Google does all your computing for you in De Cloud via HTTP, supplies you with power and internet (Google TiSP), organises your transport via driverless pod then it becomes a bit harder to tell them to go f*** themselves with their privacy-invading ways.
  • by eldavojohn (898314) * <eldavojohn&gmail,com> on Friday January 08, 2010 @12:45PM (#30696208) Journal

    ...about Google's "Smart Meter" [google.org] for your home.

    Never forget Google's main money maker is not search, it is not ads and it is not applications. It is data and the statistics that are derived from that data. On top of those statistics they build the best search, the best targeted advertising and decent applications (because although they are good applications Google Docs doesn't really benefit from these statistics). There are people looking around for horizontal integration for data and statistics in all forms of our lives because that's largely an untapped natural resource in Google's eyes. The vertical integration we are talking about in this article is run of the mill business. The "Smart Meter" is slightly more innovative horizontal search. There might not even be obvious applications for this data and statistics but the engineers don't care, that's another arm of the company's job. Personally I could see that being very very lucrative if you incentivize people to adopt the Smart Meter. Nielson would look like amateurs if Google got that thing out.

  • by erroneus (253617) on Friday January 08, 2010 @12:56PM (#30696372) Homepage

    Yes, I know the "Do no evil" thing... and who really believes it's not actually "Do no evil [to our shareholders]"?

    But Google is beginning to sprawl into some extremely creative areas and the amount of data it can collect on people is probably among the most detailed of any single entity out there. I actually don't know how close Google is to any given government or government agency or what its compliance history is with its decisions to comply with [morally] questionable requests made by government, but I seem to recall a recent story talking about Google and China.

    For what it's worth, I am still using Google as my default search engine... I am not sure I am that scared of them yet.

  • I'd love to see you prove that. Pretty sure the reason that AdWords makes money is actually because it's the eyeball dominant advertising network, which in turn is because they set it up so that anyone could join without proving themselves or talking to a salesperson or paying money, which back then was revolutionary.

    I make my advertising purchase choices based on how many people are reached and the average payout per click (which is why I've largely moved away from AdWords). I don't know anyone who buys advertising based on what they imagine Google might be measuring behind the scenes.

    You seem to believe that other advertising companies don't take statistics of any form. Why?

  • by necro81 (917438) on Friday January 08, 2010 @01:08PM (#30696534) Journal
    As a customer trying to get the best price for the energy it uses or produces, Google is much too small a player to distort the market. Datacenters use about 1-2% of the electricity produced in the US. Google is a large portion of that, but considering all the datacenters out there, I would be surprised if Google was even one half of the market. So, they are a customer for less than one percent of the total electricity generation in the US, spread out over all utility markets in the country. That's probably too little to distort the market.

    On the other hand, within very small markets, like where they actually have datacenters, they may well be the largest local consumer. If utilities were still small fiefdoms, this could be a problem. But electricity flows across states and state lines, so it would be hard for Google to corner a market even in these small locales.

    If Google were to become a major energy broker, like Enron was before its self-destruction, then we could have a problem. But we're not there yet, and that won't happen overnight, so there's no need for panic just yet.
  • Re:Uh huh. (Score:4, Insightful)

    by buswolley (591500) on Friday January 08, 2010 @01:22PM (#30696742) Journal
    Well on NPR today Google was introducing software to monitor your home electricity usage so, I call BS on their stated non-intentions.

    BTW, Google knowing energy usage patterns is WAY to INTRUSIVE for my tastes.

  • Everywhere i read i see posts from astroturfers pretending to be very concerned about their privacy. Lambasting Google for all they are worth and trying to purport them as a very evil and vile company.

    The thing is, Google hasnt got half of the information many other sources has like twitter, facebook etc. The problem isnt that Google has access to vast amount of data. To provide good search technology and ad placement they have to analyze things, just like every other ad network does, like Microsofts for eg.

    The problem isnt Google or Microsoft Bing but rather that the governments can demand any and all information about you at a whim. Not just from Google but from your bank, healtcare, utilities, ISP, telephone companies, other sites etc etc. If the information about your searches etc isnt at google its somewhere else. The only way to avoid getting stuff logged is to get off the net.

    This problem is so easy to understand that its blatantly clear that this is all part of a campaign to paint Google as an evil company. Instead you should put pressure on the politicians to stop snooping into your life and write strong privacy laws. A small number of people are so stupid they fall for the Microsoft astroturfing but one would think people on slashdot would understand perfectly whats going on.

  • by geekoid (135745) <dadinportland&yahoo,com> on Friday January 08, 2010 @01:41PM (#30697024) Homepage Journal

    err, maybe not so obvious. Are you saying people are getting pissy because Google want's to buy power direct?

    How is that a distortion?

  • Re: Subsidies (Score:3, Insightful)

    by conureman (748753) on Friday January 08, 2010 @01:42PM (#30697046)

    I don't think you're counting the U.S. Military as a subsidy, but IIRC most of our road trips in the last century boiled down to preserving our control over the lands vital to our energy interests. Repatriating our energy supply would make our military mostly redundant, IMHO.

  • by conureman (748753) on Friday January 08, 2010 @01:56PM (#30697240)

    I'm going to digitize my data and sell it on my own web site. Use the DMCA to go after those fuckers.

  • by ArsonSmith (13997) on Friday January 08, 2010 @02:04PM (#30697372) Journal

    Car analogy:

    That's like saying the gas pedal is what makes the car go. Sure for 97% of drivers that's all that maters, but the real power comes from the mechanically complex portion under the hood.

  • by Adambomb (118938) on Friday January 08, 2010 @02:30PM (#30697766) Journal

    This problem is so easy to understand that its blatantly clear that this is all part of a campaign to paint Google as an evil company.

    Personally, i think it has more to do with people seeing the story before them and knee-jerk reacting to it. Google analyzes a lot of data and has a lot of information based on it yes, so when it comes up in conversation the paranoia kicks in and the diatribes come out. I don't think it has anything to do with any organized campaign against google in any sense of it. They are not doing the same for the more obvious cases of concern because 1. they're used to those and 2. they are not being raised as the topic of conversation.

    It is a rather common exploitable bit of human psychology that people react this way. It's kinda like how the media had america in a huge pep rally shouting match over privatized insurance versus government run insurance, when all the while no one was discussing the real problem that is that health care pricing is through the roof in america. Everyone was used to it being so expensive and no one was discussing the cost, so everyone ranted about how it was going to be paid instead.

  • Re: Subsidies (Score:2, Insightful)

    by Anonymous Coward on Friday January 08, 2010 @02:56PM (#30698132)
    You poor deluded man. Grenada. Haiti. Somalia. Serbia. Afghanistan, WWII, WWI. I'll give you Vietnam and Korea for free.
  • by rickb928 (945187) on Friday January 08, 2010 @06:29PM (#30701116) Homepage Journal

    Cost and margin matter the most when disruptive influences impact a market. So far, there is no disruptor in the music player market - iPods rule the market, and the Zune is not undercutting the iPod pricing. Now, if someone could come out with a iPhone-quality device at half the price, maybe, but the reality is that that market is also ruled by the music sources. iTunes is really what sets the iPod prices.

    If some pasta company, for example, decided to cut prices 40% and outlast their competition, they might be able to. Then again, they might not be able to - lack of capacity, etc might mean that you can't buy their pasta at any price, it's sold out. If I can't buy cheapo pasta at 40% off 'cause it's out of stock, it really doesn't matter what price it is, I'm buying something else. If, however, I have the capacity, I can outlast the competition and drive them out. This is called predatory pricing. Any bets on how long the price war continues? Of course, maybe my competitors match me. IN which case, at some point, my CEO asks what the point of the pricing war is, since we gained no market share. Eventually, prices will rise.

    Notice I did not mention costs in any of this. Cost doesn't matter. It doesn't matter. In a totally free, perfectly functioning market, cost sets the price floor. but it doesn't set the ceiling. And a market priced at the floor will fail to be perfect soon enough, as other factors such as management efficiency, marketing/advertising, and disruptors change the market and either kill off the losers or reward the winners.

    As an example, most home furniture manufacturing has moved to China over the past decade or more. Have furniture prices gone down? Examples here would be helpful.

    I haven't researched the furniture pricing issue, but my friends in North Carolina claim prices haven't changed. Yet their wages went from middle-class to zero. Chinese labor is cheaper. Did it work? For who?

    Really, it is counter-intuitive until you understand it, but cost doesn't matter.

    And trust me again, windpower will price itself based on the competition, not based just on cost. In fact, windpower will not even EXIST unless it can come in cheaper than the competition. Not CHEAPEST POSSIBLE BASED ON COST. cheap'ER'.

    That's all they are talking about. Cheaper. It looks like a cost issue, but it is not. It is a prcing issue. Cost is the least of their worries.

    And yet, the power generation market in the U.S. is fascinating. Natural gas pricing bounces around a lot on the spot market, but utilities buy on long-term contracts, usually more stable. Peak demand is importnat, I think, because it costs a LOT to buy extra fuel above your contract.

    Sometimes I think cost/price is a chicken-and-egg issue. No longer.

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