Phase II of Renewable Energy in America

National Policy Conference

November 28-29

Cannon Caucus Room, Washington, DC

American Council On Renewable Energy (ACORE)

Thank you Mike.  I am very, very pleased to be here and thanks for a wonderful, wonderful conference.   I am batting clean-up and it reminds me of Congressman Moe Udall who used to walk these halls and have some very important hearings. And after a very long hearing he would look out at the many witnesses and say, "Well everything has been said, but not everyone has said it.  Proceed."  And then of course in this position, I am also in that position where I am the only thing, as we heard before, that stands between you and a stiff drink, so that is the other part of this. But I did want to give you my favorite line, which is of course the toast given at all the ethanol conferences.  People stand up and hold up that glass of alcohol and say, "Drink the best, burn the rest."  Anyway, I am very pleased to tell you about what is going on at Google in the world of renewable energy.  And I first want to thank Mike and Jody and the ACORE staff, the conference co-chairs for putting out a really, really great meeting.  Let's give them a big round of applause. <Applause>. I would also like to thank my ACORE Board Co-Chair John Geissman, a great leader and a very inspiring speaker in so many different ways. I would also like to recognize my Google colleague Michael Terrell.  Mike are you still here? There he is way in the back.  Raise your hand again Michael.  We convinced Michael to leave DC and come to San Francisco to work with Google and he is a real policy expert in the area of climate change and energy, and I encourage you to get to know him.  So earlier today Michael Liebrich of New Energy Finance, gave my talk a little bit of an intro when he said, "You know where will the next Google of renewable energy come from?"  And then he paused and said, "Well, maybe it will come from Google."  I thought that was nice.  I already have sent that back to my colleagues at Google.  So, and in fact, a few minutes ago I googled renewable energy,   I wanted to see what I would find. And when I googled renewable energy, on the first page was our announcement on Tuesday that we are getting into the renewable energy business. So there is some interesting circularity here.  <Laughter>.  But I will take it, whatever it means, as tired as I am. So, on a more serious note, this decision reflects first and foremost the strong commitment of the co-founders of Google, Larry Page andSergey Brin to help realize the promise of renewable energy.  These guys really feel this in their heart and want to apply Google's talents to realizing this great dream that we all have.  We call our initiative "Renewable Electricity, Cheaper Than Coal", RE<C, scientific notation, RE less than sign C, which has caused a whole flurry of people who know something about HTML to write us and say, "Wait, this is way too hard.  Why did you pick this?"  Well we picked it because we thought people would remember it, "Renewable Energy Less Than Coal", RE<C. Our goal is to make electricity produced from renewable sources cheaper than electricity produced from coal, renewable electricity produced cheaper than coal. And to really motivate our progress and measure our results, we have set a more specific objective.  Google will develop one gigawatt, 1,000 megawatts of renewable electricity generating capacity, enough to power a city the size of San Francisco that is cheaper than coal, and we want to accomplish this in years not decades.  We were discussing this one gigawatt goal at a meeting a couple of weeks ago and somebody leaned back and said, "You know why don't we make it 1.21 gigawatts?" <Laughter>.  Does anybody know what 1.21 gigawatts is? 
M1:  Back to the future.
Dan Reicher:  Back to the future.  Apparently, and you can now go to our Web site and see this, if you go back to the future, the crazy scientist says, we need 1.21 gigawatts, 1.21 gigawatts, so he could get his DeLorian time machine to go back to the future.  And of course he needed it instantaneously, so there was the lightning strike.  The press release almost had Google's goal as 1.21 gigawatts. <Laughter>.  But in the end, nah, people said, just make it a gigawatt and leave it at that. I thought that would have been fun and very Googlie as we say.  But anyway, so why this overarching goal of renewable energy less than coal? And I will give you the simple answer.  Renewable electricity simply costs too much today to compete with coal.  It costs too much today to compete with coal.  Because it is cheap, coal is the predominate source of both existing and new electricity capacity worldwide.  Consider the numbers.  Coal provides 40 percent of electricity globally, provides 50 percent of U.S. electricity.  In 2006 alone, China built almost 100,000 megawatts of coal, roughly ten percent of the entire U.S. generating capacity.  Renewable electricity on the other hand, is expensive. As a result, it has barely made a dent in global or U.S. electricity capacity. Consider the numbers.  In very rough terms, solar PV is five times more expensive than coal, solar thermal three times as much, geothermal twice as costly and wind about 50 percent more.  This is straight up, unsubsidized.  Those are very rough and I know people will debate them, but I think the point is it still costs too much.  And the capacity numbers speak for themselves, with non-hydro renewable electricity at about two percent of generating capacity both globally and in the U.S.  Where renewable electricity has enjoyed mandates and subsidies or where electricity prices are otherwise high, we certainly have seen significant and very impressive growth. But where renewable electricity has to compete straight up with coal, we just aren't making enough progress.  This isn't because people haven't been working to solve this problem. For decades, talented people have been working to lower the cost of renewable energy and there has been great progress.  But we face a simple economic reality, price matters whether it is cars, computers, hamburgers or electrons.  And green electrons, as attractive as they are, simple cost too much to compete with coal today. RE<C is all about addressing this disparity.  In the balance hangs one of our most important tools in confronting the climate crisis. So given the above, why is Google, a company largely focused on Internet search and advertising, getting into the renewable energy business?  There are several reasons. Google is a significant user of electricity at its data centers and other facilities. At many locations, we simply have not been able to find large scale cost competitive supplies of renewable electricity and we've really tried.  Our data centers have given us experience in how to develop and operate large energy intensive facilities.  We have a talented group of engineers who love to take on complex and important challenges. We have committed to reducing our environmental footprint, and we want to do more than just offset our carbon emissions but actually directly reduce them through development of large scale renewable energy sources.  We believe there are two funding gaps in renewable energy today.  First, in R&D that sits between government and university supported basic research and venture capital backed companies, second in the development of early high-risk commercial scale projects, and last but not least, we think we can make some money in the renewable energy business, a good thing for our shareholders as well as the planet. Having said all this, we do not presume that we have all the answers or even know all the questions to ask in making renewable electricity cheaper than coal.  We simply want to add our commitment and resources, both human and financial to addressing this global imperative.  So what is our plan?  RE<C is definitely a work in progress, but here is what we know today.  We will focus initially on three areas of renewable energy with the potential to produce large amounts of electricity cheaper than coal; solar, thermal, wind and geothermal. We are creating a renewable energy R&D group within Google's engineering ranks and we are looking for talented engineers, technologists, energy experts and others to join us.  Send us resumes. I will be at MIT next week speaking to 400 students and professors there and we hope to see some. We are making investments in companies with promising technologies.  We are working on our own renewable energy projects to power our facilities and demonstrate breakthrough technologies.  We are supporting policy measures that can help address the RE<C equation, and this is an area of vital interest where we are doing some serious work and there will be more to hear from us. And we are using Google's information tools to help advance sustainability starting with Google Earth and going from there. Finally, we expect to spend tens of millions on research and development and related investments in renewable energy in 2008 and we also anticipate investing hundreds of millions of dollars in breakthrough renewable energy projects, which generate positive returns. In all of this we are looking for smart people, good ideas, compelling investments and high leverage partnerships to make RE<C a reality.  We look forward to hearing from you and working with you. Thanks very much.  <Applause>