Praveen Paranjothi on SEINET: Google is innovating new methods to buy…

Google is innovating new methods to buy clean electricity, enhancing…

Praveen Paranjothi · 2024-06-23T20:54:24.000Z

Google is innovating new methods to buy clean electricity, enhancing the viability of low-carbon power projects traditionally deemed too costly for utilities. Google announced a novel agreement with NV Energy and geothermal startup Fervo, where Google will pay higher rates for power at its Nevada data centers. In return, NV Energy commits to purchasing 115 megawatts of new geothermal power from Fervo. This deal, an evolution of the traditional power purchase agreement (PPA), aims to facilitate the financing of expensive clean energy projects. Google plans to replicate this model with other utilities such as AEP, Dominion, Southern Company, and the Tennessee Valley Authority. These agreements might include advanced nuclear power, long-duration storage, and grid improvements. Traditional corporate PPAs have driven clean energy adoption by enabling companies to sign long-term purchase agreements with renewable energy developers, thus making projects financially viable. However, these traditional PPAs face limitations, especially in states with vertically integrated utilities and for expensive, advanced clean energy technologies. Rising costs due to inflation and supply chain issues also pose challenges. Google's new approach, termed the "clean transition rate," reintroduces utilities as intermediaries, allowing them to select the best mix of clean technologies and negotiate rates for large buyers. This method is projected to reduce Google's costs to achieve 100% clean power by 2030 by 40%, and it can enhance the overall cleanliness of the grid without increasing rates for regular customers. Additionally, a new group PPA product by Watershed pools demand from multiple buyers, making it feasible for smaller companies to participate in clean energy projects without the long-term commitment and financial risk associated with traditional PPAs. This approach could significantly expand clean energy adoption in developing countries by addressing financing and currency reserve challenges. https://www.semafor.com/article/06/19/2024/google-is-reinventing-the-clean-power-market

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Praveen Paranjothi on SEINET: Google is innovating new methods to buy…