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Why is Google buying into wind?

So you thought Google was just a highly successful internet search engine? The company’s energy arm recently signed a deal to buy 114 megawatts of energy from a wind farm in Iowa, marking the first deal done by the company’s energy subsidiary

A Google spokesman said the company had signed a 20-year power purchase agreement with wind project developer NextEra Energy Resources. Google Energy will buy the bulk of the energy produced from the Story II Wind Energy Center in Iowa’s Story and Hardin counties.

“Buying wind energy is part of Google’s efforts to reduce its carbon footprint and operate as a carbon-neutral company,” said Google Senior Vice President of Operations Urs Hoelzle, in an internet blog post. The deal is significant in that it is the first done by Google Energy, a subsidiary created in December 2009. When news of Google Energy came out, there was much speculation as to why the company, which is active in renewable energy and efficiency, would want to operate a wholly-owned subsidiary.

Typically, companies seeking to buy clean energy need to invest in on-site renewable energy, such as a solar array, or to buy renewable energy certificates, both of which Google has done. Renewable energy certificates (REC) are assets that represent the environmental attributes of energy. They can be bought and sold by third parties. By buying directly from the wind farm, rather than RECs, Google thinks it is providing more benefit to clean-energy developers, which need long-term financing, said Hoelzle.

“By contracting to purchase so much energy for so long, we’re giving the developer of the wind farm financial certainty to build additional clean energy projects. The inability of renewable energy developers to obtain financing has been a significant inhibitor to the expansion of renewable energy,” he said in the blog.


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