Google strikes record solar-storage deal

Source: By Edward Klump, E&E News reporter • Posted: Thursday, January 9, 2020

The company behind the world’s most popular search engine is seeking approval for what may be the world’s largest corporate deal for utility-scale solar with storage.

Google LLC has reached an energy supply agreement with NV Energy to power a $600 million data center planned for Henderson, Nev. The parties outlined the electricity plan in a recent NV Energy filing with the Public Utilities Commission of Nevada (PUCN).

The transaction is expected to involve about 350 megawatts of solar and between 250 and 280 MW of battery energy storage, an attachment to the filing said. The document, submitted last month, said the plan was believed to “represent the largest corporate utility-scale solar plus storage procurement transaction of its kind in the world.” NV Energy has asked for approval of the application from PUCN by the end of February.

“The storage element of this deal is very exciting and is crucial for facilities like data centers, which require reliable energy to power around-the-clock operations,” Shawn Rumery, director of research for the Solar Energy Industries Association, said in a statement.

The Google-NV Energy proposal represents another possible milestone for renewables and storage, which have been gaining traction among corporate players that want to cut carbon dioxide emissions tied to climate change. NV Energy is part of Warren Buffett’s Berkshire Hathaway Inc. portfolio.

A report from Wood Mackenzie touted by the American Wind Energy Association (AWEA) last year estimated potential demand for up to 85 gigawatts of renewable energy within the Fortune 1000 group of companies through 2030. And a report from Wood Mackenzie and the U.S. Energy Storage Association said the country’s energy storage market could grow by more than 12 times from 2019 through 2024 to over 5.4 GW annually.

Google, which is part of Mountain View, Calif.-based Alphabet Inc., has been a key part of emerging trends. A white paper attached to the recent solar storage filing in Nevada said Google had signed over 50 renewable energy purchasing agreements since 2010 to procure the output of more than 5.5 GW of wind and solar energy on four continents — making it the world’s largest corporate buyer of renewable energy.

“Pioneering companies like Microsoft, Google and Facebook have blazed a trail for scores of companies seeking to shrink or eliminate their carbon footprints and served as a catalyst for the development of peer groups,” said the report last year from Wood Mackenzie and AWEA.

Questions remain about how wind and solar will be affected by the phasing down of U.S. renewable energy tax credits, as well as by concerns around the life-cycle effects of mining for materials used in solar and storage operations. Google also has been criticized for donations to groups labeled “climate deniers” by The Guardian.

But corporate renewable deals have continued, and the issue of electricity is a pressing matter for Google. A filing indicated that its Nevada data facilities could reach commercial operation in the first or second quarter of this year.

“We eagerly await the Public Utilities Commission’s decision and have taken steps to ensure they have all the necessary information needed to complete their review,” Google said in a statement to E&E News.

Seeking carbon-free

The Google data center would be in a short-term energy supply period and then a shift to a long-term energy supply setup once the solar-plus-storage facilities reach a commercial operation date. If that doesn’t happen by the start of 2024, the document said, the parties intend to negotiate energy supply terms until the facilities are ready for commercial operation.

Rumery said that “this kind of investment will only continue as costs keep falling and demand for clean energy grows.”

Certain financial terms of the deal weren’t publicly released, though the filing mentioned that a fixed energy and capacity price would take into account various factors.

The white paper in the filing outlined a Google milestone of matching 100% of its global power consumption with renewable energy, something the paper said happened in 2017 and 2018. Google now is aiming for a goal of sourcing carbon-free energy for its operations on a 24/7 basis, the document said.

“This means achieving carbon-free energy supply in every hour of the year, at all of its locations,” the white paper said.

Jennifer Schuricht, a spokeswoman for NV Energy, said her company was pleased to reach an energy supply services agreement with Google for its new southern Nevada facility. She said that agreement was filed with PUCN, and so was a tariff to allow new large customers to be served using customized energy products.

“This filing reflects NV Energy’s commitment to driving economic development in Nevada through the creation of new tariffs and customized energy service agreements that meet the complex and individualized energy needs of customers, like Google, who are bringing their business to our great state,” Schuricht said.

She said the agreement with Google would “bring additional renewable energy and battery resources to Nevada that will provide benefits for all customers during peak energy usage periods.”

The tariff and the energy supply agreement need approval from the state utility commission, Schuricht said. The utility company indicated it expects to seek regulatory approval of selected resources through an amendment to an integrated resource plan.

The Google-NV Energy proposal for solar and storage was reported earlier this week by S&P Global Platts.

While state regulators previously backed a fine against NV Energy related to incentive funds for energy storage programs, the company has been talking a lot about storage of late. In December, it noted state regulators’ approval of a plan that would bring about 1,190 MW of new solar energy projects to Nevada and 590 MW of energy storage.

A deal with Google would seem to provide a boost to NV Energy, which has seen some large customers seek other power options in Nevada.

And the agreement would provide “Google with flexibility to grow its facility at the speed that its business demands,” the white paper said.