Google’s Rick Needham

By SETH MASIA

Google Rick NeedhamRick Needham joined Google in 2008, as director of green business operations and strategy. A 1992 graduate of the U.S. Naval Academy, he served eight years as a nuclear submarine officer, taking time off to earn a master’s degree in aeronautics and astronautics at Massachusetts Institute of Technology. He spent some time at Bain & Co., the management consulting firm, while he earned an MBA at Harvard. In 2002 he joined Dean Kamen’s DEKA Research, leading the lab’s business development effort and managing projects in clean energy, medicine and robotics, notably a semirobotic prosthetic arm.

“The large-scale energy projects are important to the future and to the company. As a large purchaser of energy, we want to see long-term price stability along with new sources of renewable energy that make economic sense.”

Google’s eight massive data centers in the United States and Europe are huge power purchasers, using electricity for data processing and cooling. “Google has been obsessive about efficiency within its own data centers since the company’s inception,” Needham said. Its centers, through careful design, use electricity at half the rate of the average large data center, saving the company over $1 billion to date. Nonetheless, Google’s website claims it buys roughly 0.01 percent of all the electricity generated in the world. That would be about 2 terawatt-hours annually. Needham estimates that about 25 percent of Google’s power now comes from renewable sources. The company had already created an efficient headquarters campus, the Googleplex, equipping an existing 500,000-square-foot (46,452-square-meter) structure with 1.6 megawatts (MW) of photovoltaic (PV) arrays, in 2007 the largest such array in the country.

Today, Needham and his team have invested about $853 million in clean energy projects, plus a commitment to help fund the development of the $5 billion Atlantic Wind Connection direct-current trunk line. Recent investments include about $355 million [note: $280m for Solar City, $75m for CPF] in residential leasing (through SolarCity and Clean Power Finance), $297 million in several U.S. wind farms, $178 million in startup and project funding for the BrightSource Ivanpah power tower concentrating solar power plant and $5 million for the Brandenburg PV farm in Germany. This doesn’t include seed capital for a number of early-stage companies in wind, geothermal, biofuels, efficiency and other clean-tech sectors.

Needham is adamant that Google invests pragmatically, looking for solid financial returns. He’d like other large corporations to emulate Google’s investments in clean tech, and can point to a few European companies that do: Ikea and Volkswagen, for instance. But so far it’s clear that Google will invest where most other cash-rich corporations fear to tread. “We’ve had companies talk to us about how we do this, but in the typical corporation there’s resistance from the treasury officer on the grounds that a renewable energy investment isn’t part of the core business, so why do it?” he said. “We are lucky in having a treasury that looks at a promising investment and says, ‘Why not?’” As a result, he believes that Google is the largest investor in renewable energy outside the energy business and financial sector.

“The large-scale energy projects are important to the future and to the company,” he said. “As a large purchaser of energy, we want to see long-term price stability along with new sources of renewable energy that make economic sense.”

He’s happy with all the recent investments. “SolarCity, for instance, has been growing quite well,” he noted. “Now that [equipment] prices have come down and financing is in place, clean energy can be sold at lower prices. The fact that panel manufacturers have lowered their prices by two-thirds over the past couple of years is amazing. SolarCity is hiring like crazy and generating local jobs.”

Meanwhile, Google’s portfolio of wind farms are all up and operating, except the newest one: Shepherds Flat, the 845-MW project along the Columbia River, is under construction and should commission next year as the largest wind farm in the world.

“BrightSource is moving along quite well,” Needham said. “The first tower is going up now and all three plants are in progress. The company is doing well in respect to its environmental issues. We’re quite happy with the adaptability it has shown in dealing with those challenges.”

Needham perks up when discussing the Atlantic Wind Connection (AWC), the 350-mile undersea trunk line meant to serve up to 6,000 MW of wind farms off the coasts of New Jersey, Delaware, Maryland and Virginia. Google has committed to taking a 37.5 percent share in the venture, which may cost $5 billion to build. The first steps are in place: AWC recently earned approval of its incentive rates through the Federal Energy Regulatory Commission and submitted their request to the Department of the Interior for approval of the cable right-of-way.

“It’s risky early stage investment, but will be transformative,” Needham said. “It will kickstart the entire industry. The United States as yet has no offshore wind, despite a resource that [DOI] Secretary Salazar says has the potential for 1,000 gigawatts. The cable will provide a very strong signal to manufacturers and developers that there’s 6,000 MW of offshore wind to be connected. It will greatly reduce the cost of permitting and connecting all those projects, because we’ll already hold the permits for crossing sensitive coastal areas. It will also greatly increase the value of the high-voltage DC source by providing control of how that energy is transmitted and aggregated. Any single-asset transmission line would have a utilization factor of about 50 percent, but this backbone will aggregate multiple wind farms for a better utilization factor. Then the grid operator really controls where and how the power comes in. Lower transmission losses along the high-voltage DC cable means the wind farms can be farther offshore in a better wind resource. And we’ll have black-start capability, meaning we can reboot the grid if something onshore takes it out. We’ll have better energy security with a high-capacity line buried 6 feet, in parallel to existing lines. And all of this taps just a tenth of the potential we see there.”

Needham sees a future for similar trunk lines wherever a rich wind resource lies close to load centers. The mid-Atlantic coast comes first because it constitutes the biggest load center with the highest energy prices. But he can see similar projects working in the shallow waters of the Great Lakes and possibly the Gulf Coast. The Pacific Coast is problematic because of its deeper waters.

Going forward, Google sees more opportunities for renewable energy investments. “If we don’t find it attractive, we won’t do it,” Needham said. “We don’t have to be in the space.” He cycles back to Google’s own long-term need for cheap clean energy. “Our goal is to see renewable energy deployed widely and cheaply. We want to get more renewable energy onto grids at the lowest possible cost.”

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