As early as 2004, Google aggressively began presenting itself as a socially conscious, corporate citizen, promoting green technologies and responsible conservation.  And thus, Google’s recent application with the US Federal Energy Regulatory Commission (FERC) to buy and sell renewable energy at bulk prices hardly seems surprising.  This move is especially timely on the heels of Google’s other green measures like PowerMeter, Solar Panels, RE<C, Clean Energy 2030, and RechargeIT – most of which fall under the search behemoth’s non-profit arm, Google.org.

The rationale behind this transition into renewable energy is fairly straightforward.  Google has over 12 data centers in the US (that we know about), plus another 25 or so spread around the globe.  Powering and cooling these monstrosities require a tremendous amount of energy.  According to some estimates, Google’s roughly 500,000 servers consume upwards of 20 megawatts of energy (enough to power 16K American homes).  This conservatively translates to US$2 million a month in electricity charges, much of which comes from carbon-emitting power sources.

So yes, it makes perfect sense that one of the world’s largest, corporate consumers of energy would want to:

• reduce its dependence on carbon-emitting power sources
• reduce its dependence on sources whose prices fluctuate so erratically
• lower its monthly electric bill
• continue promoting its image as a responsible, corporate citizen

If Google can leverage its resources to develop, buy, and sell renewable technologies that compete with carbon-based sources, why wouldn’t it?  Why should it continue to wait for the “market” to come up with solutions, when the invisible hand of economics has only delivered muted results over Google’s 14-year history?

However, even the FERC seems aware of the dangers of transferring greater power to an entity with such an impressive track record of market dominance in nearly every aspect of its operations.  When processing the nearly 300 million queries that it receives daily, Google accumulates a stunning amount of personal data – if not directly through Google Search, then through Gmail, Google Docs, Google Reader, Google Health, Android, Picasa, Youtube, and the multitude of other information-hungry tools powered by Google, Inc.  If its request to enter the “power game” goes through with the FERC, Google’s empire will become that much more formidable.  There won’t be many other frontiers left for Google to conquer, unless it turns its attention to politics, religion, and sex.

Part of the “perceived” danger of Google’s entrance into electricity lies in the company’s potential transition into the retail sector.  Its current request with the FERC is for wholesale electricity, meaning that it plans to buy and sell renewable energy at the going market-based rate for bulk purchases.  But let’s not kid ourselves.  Sooner or later, Google will end up going into the retail market, and if history is any indication, it will be unbelievably successful, squeezing many players out of the market as it connects directly with end users like you and me.

Left unchecked, might Google one day power the world?

Personally, I’m a huge fan of Google.  I’m aware of the dangers involved with concentrating too much power into the hands of a few – especially if the few already control a disproportionate amount of the world’s information.

However,

I’ve decided to adopt a “conveniently” and “selectively” long-term perspective.  I say “convenient” and “selective” because I choose to focus on those areas I deem most pressing, while ignoring equally important areas governed by more flexible deadlines.  Privacy concerns and monopolistic consolidation are major concerns deserving considerable attention.  But far more urgent is our ability to transition to a carbon-neutral economy.  And I believe that Google, through internal efforts and external alliances, is best positioned to help push such a transition.

Any initiative that brings this much focus to the energy debate is an initiative that I welcome.  If an organization as energy-hungry as Google can reduce its fossil fuel consumption, then I’m all for it.  If Google can help the industry achieve technological breakthroughs and economies of scale that, thus far, have alluded all but the largest players, I applaud its efforts.

To be sure, Google’s vice-like grip on modern telecommunications and information technology is something that needs to be addressed.  I’m not comfortable with any entity (public or private) having that much power.  Competition is a good thing, and I don’t want any company to dominate the market, whether we’re talking about information or energy.  But I’d rather have this debate at a time when the ice caps aren’t melting, species aren’t disappearing, and our economy has moved closer to a position of sustainable growth.

Related Posts:

A Car Free Life

How to Go Green at Work

People’s World Conference on Climate Change

When reading most any book on climate change, energy efficiency and conservation are often touted as the easiest and least painful methods to reduce CO2 emissions and erratic weather patterns. The basic rationale behind energy efficiency is simple enough – if you switch to compact florescent bulbs or a fuel-efficient car, you can achieve the same amount of work for a fraction of the energy. For every mile driven or for every hour of illumination, you end up taking much less from Mother Earth than if you relied on conventional means of transport or lighting.

The elegant logic behind this approach is so sound that I would almost question any climate change book that did not devote at least a full chapter to efficiency and/or conservation. Simply put, we have very limited resources and should do everything in our power to conserve them. In the U.S. especially, our energy usage is off the charts. We represent only 5% of the world’s population but consume 26% of the world’s energy resources, suggesting that even conservative measures to reduce oil, gas, and coal consumption in the US could have dramatic effects on climate change and the future of this planet.

The standard light bulb that we use in the US is actually a perfect microcosm of America’s profligate use of precious energy. Less than 10% of the electricity used to power an incandescent light bulb comes out as actual light, with the remaining 90% coming out simply as wasted heat. Similar mind-boggling ratios exist throughout our industrialized economy, and thus, there clearly exist opportunities to combat the destructive effects of fossil fuel if we simply reduced our wasteful habits and consumed energy more responsibly.

However while writing a paper on renewable energy innovation, I learned about William Stanley Jevons and his 1865 paradox about the long-term futility of energy efficiency. In studying England’s coal use after James Watt’s perfection of the steam engine, Jevons noticed a startling trend. Watt’s engine was vastly superior to previous designs, using much less energy to produce the same results as earlier coal-based technologies. However, rather than reduce the overall amount of energy that was used, this more efficient engine actually stimulated increased demand for coal. In effect, greater efficiency simply made each unit of coal cheaper to buy, thus, increasing the total amount of coal consumed. One need look no further than the standard supply/demand curve to understand how this works. As the price of a good goes down, demand for that good increases.

More than 100 years after Jevons, two economists, Daniel Khazzoom and Leonard Brookes, continued the efficiency debate, focusing on the potentially self-defeating performance standards mandated by the California Energy Commission. They determined that policies regulating greater efficiency could ultimately have the adverse effect of boosting demand and overall energy use. Fellow economist, Harry Saunders, went on to argue that not only does the price of each energy source become cheaper with greater efficiency, but also, cheaper energy sources help to grow the national economy. This has an indirect effect on aggregate energy consumption as more people begin purchasing refrigerators, cars, and other power-hungry items in much greater numbers.

In a nutshell, greater energy efficiency makes fuel cheaper to buy, leading to increased energy consumption, both as a result of cheaper oil prices and growing demand for consumer items.

If you find it difficult to swallow the notion that “efficiency is destructive,” I certainly wouldn’t blame you. I too remain suspect whenever I predictions from leading economists, especially given the sheer number of “experts” who played a role in the current recession. Economists have an uncanny ability to be on the cutting edge of “wrong,” while simultaneously winning accolades and awards for their misguided efforts. However, the doomsday predictions of Jevons, Khazzoom, Brookes, and Saunders are not merely theoretical musings unsupported by real world events. We’ve witnessed the counterintuitive coupling of greater efficiency and increased usage time and time again over the years.

Following the OPEC oil crises of the seventies, manufacturers began phasing out America’s iconic, gas guzzlers in favor of smaller, more fuel-efficient models. Lighter, faster, and less polluting, the cars of the 1980s and beyond held the promise of decreased dependence on foreign oil. Many hoped that a new day might emerge when oil shocks might become a thing of the past.

But then an interesting thing happened.

We simply began driving more. We moved out to the suburbs. We began shopping at megamalls miles outside town. We bought cars for our children since, even with part-time jobs, they could keep their tanks full. As the relative price of energy declined due to increased efficiency, we simply consumed more and more. So even though our cars today enjoy an average of 40% better gas mileage than they did in 1980, our appetite for oil has increased nearly 30%.

We can see this same trend in other facets of daily living. Just think about what you might have plugged into a wall socket circa 1960 compared to what you typically plug in today. In addition to turntables, TVs, laundry machines, fridges, and lamps, we now have computers, clock radios, air conditioners, heaters, routers, modems, alarm systems, dishwashers, coffee makers, microwaves, blenders, juicers, cell phone chargers, and printers.

But wait, aren’t all these additional appliances merely a reflection of continued technological innovation? After all, what does a blender have to do with fuel prices?

While yes, each new appliance that appears on the market is a result of research, design, and development, the true cost of a new dishwasher or alarm clock includes more than the ticket price. Consciously or not, we invariably factor in the cost of using that item. So as relative energy prices continue to decline as a result of greater efficiency, we are more inclined to purchase additional items for our homes and offices. After all, when energy is relatively cheaper as a result of better appliance design, what does it matter if we plug in an extra iPod or TiVo box? However, as the energy required to power each new item goes down with time, the number of items plugged in goes up, resulting in greater aggregate demand for energy.

So what does this mean for the energy conservation movement? If increased efficiency has the opposite effect of greater aggregate energy use, how should we frame the issue moving into the future?

That is a very good question, and I don’t have all the answers. We undoubtedly need to take a closer look at the technologies, policies, and attitudes that influence energy consumption at both the micro and macro level. While I don’t have any easy solutions to offer, I still see tremendous potential in our continued push towards energy efficiency.

A few weeks ago, I had an opportunity to visit a home in Kuala Lumpur, Malaysia that was in the process of installing 3 kilowatts of solar energy capacity on its roof – enough to power everything in the home except for the current air conditioning system. In fact, this installation would actually result in excess energy during the daytime that could then be sold directly to the utility company. At night, when the sun goes down, this home can repurchase the energy back from the utility company for continued, uninterrupted power. Not surprisingly, the homeowner is considering replacing all of his appliances, including the air conditioner, with energy efficient technologies so that he can eventually realize a net profit by selling more energy to the utility during the day than he ever needs to buy back at night.

With this particular example, each improvement in efficiency that the homeowner makes moves him closer to the breakeven point at which a solar panel installation or similar improvement can cover all of his current energy needs.

When applied at the national or global level, similar trends emerge, making it increasingly difficult for renewable energy naysayers to label solar, wind, or geothermal technologies as insufficient for powering the world. The more that we cut down on total energy consumption, the more attractive the economics of renewable energy becomes. And thus, I still believe that energy efficiency is a wondrous and increasingly necessary measure. Turn off the lights when you’re not using them. Replace any appliances that use electricity inefficiently. Upgrade to a hybrid car if your budget allows. While yes, each of these steps potentially feeds into Jevons paradox, there exist many potential gains that arise. These gains will only become more pronounced as renewables become cheaper with time and fossil fuel prices continue to rise.

Related Posts:

A Car Free Life

How to Go Green at Work

People’s World Conference on Climate Change

According to a speech delivered by Robert F. Kennedy Jr. at last week’s Solar Power International conference in Anaheim, the US is in an “arms race” with China over solar energy manufacturing.  Both countries, working furiously, want to become the world’s default manufacturer of photovoltaic (PV) technology.  With untold billions of dollars in potential revenue at stake, the US and China are literally racing to perfect these increasingly affordable silicon-based panels, capable of transforming the sun’s rays into essentially free and clean electricity.

As both super powers gear up production to wage war on the international stage, it is hard to remain optimistic about America’s prospects for victory.  After all, China, with her abundant and cheap labor, singularity of focus, and long history of undercutting prices, has numerous advantages over US production capacity.  We already outsource so much of our manufacturing volume to that part of the world, as evidenced by the countless containers we send back empty on the return voyage across the Pacific. In addition, we are already heavily indebted to China; a trend that might only worsen as we try to climb out of the current recession.

Make no mistake; in China, America faces a formidable foe.  It is extremely difficult to look at the history and economics of the situation without feeling a sense of dread as China marshals its resources to challenge American solar supremacy. However, Kennedy’s framing of the issue potentially misses the bigger picture.  When one approaches US-Chinese photovoltaic competition strictly from the supply side, the image is certainly bleak.  But there are larger forces at work, and by taking a few steps back, long-term benefits can and do emerge.

Just so we are clear, for American PV manufacturers to cede ground to Chinese producers is hardly a good thing for the stateside solar energy market.  In addition, becoming more competitive and spurring global demand for American-made photovoltaic panels could add a huge boost to the national economy, creating jobs and infrastructure.  In fact, many have argued that a green revolution, complete with solar, wind, geothermal, smart technology, activism, and legislation, is exactly what this country needs to climb out of the current recession.

I certainly would like to see this happen, and with the right type of push from relevant stakeholders, it is possible.  However, Chinese competition is not entirely bad for the US economy.  After all, isn’t the ultimate goal to become the world’s largest consumer of solar technology, and not necessarily the largest producer?  True, both would be terrific, but if lines must be drawn in the sand, I’d rather have our country emerge as the undisputed photovoltaic user of the world.  This is where the future lies.  In a very basic sense, every PV shipping container received and sent back empty to China brings us closer to true energy independence and environmental sustainability.

At the global level, the US-China solar arms race is also a potential plus.  Based on the proliferation of renewable energy portfolio legislation around the world, the international community appears increasingly committed to making solar energy and other sustainable technologies ubiquitous.  And thus, competition between US and China is ultimately a win-win situation as well.

Heretic and unpatriotic, perhaps, but imagine if companies like US-based BrightSource Energy (a firm in which Kennedy’s company has a stake) maintained its control over photovoltaic R&D and outsourced the actual manufacturing to centers like China.  The downside is that job creation and economic recovery might both take considerably longer.  But we’d be able to reap the benefits of American ingenuity and Chinese production capacity to create efficient and inexpensive PVs for the stateside market.  There is a very real possibility that sustainable energy solutions could be deployed faster, more affordably, and with a shorter payback period if we combined the best elements of both worlds.

Whether we work together, compete aggressively, or strike a balance in between, I see only net progress.  We already import an alarming amount of our energy from abroad, and we already borrow heavily from China to pay for those imports.  So even if we “lost” the solar energy arms race to China and turned to it as our default PV provider, we would still be importing energy solutions (though not nearly as much) and we’d still be sending large sums of money to China (again, not as much in the long-term).

It all boils down to a matter of preference.  I want the US economy to recover and I want it to recover as quickly as possible.  Millions of Americans are out of work, homes, and hope.  Words cannot fully capture how dire and urgent the situation is.  However, the environmental crisis is arguably more pressing.  For whereas the recession will eventually improve, the same cannot be said of the environment.  We have one shot and a very small window in which to make things right with Mother Earth.  So if China is able to outcompete our guys and offer American consumers cost-effective, energy solutions, it is difficult for me to view the current “arms race” entirely in black and white.  As long as we compete, there are net positives no matter which country emerges victorious.

Related Posts:

Bill Collectors: From Breaking Laws to Breaking Legs

CNN vs. Fox: A Media Bias Case Study

The Illusive Surplus

Supreme Court Hands Power to Corporations

Troubling Travels: Reconciling Safe Skies with Personal Privacy