January 6, 2010 9:58 PM PST
by Martin LaMonica
Google took a step toward entering the energy business with the creation of a subsidiary called Google Energy and a request with a federal agency to buy and sell electricity on the wholesale market.
The search giant formed a Delaware-based company called Google Energy on December 16 of last year, according to Delaware state records. The Federal Register on Tuesday referenced Google Energy's request to the Federal Energy Regulatory Commission (FERC), the agency with oversight over the power grid.
Rather than represent a shift beyond Google's core search business, though, the moves are meant to give Google flexibility in pursuing its corporate goal of carbon neutrality, according to a Google representative.
"Right now, we can't buy affordable, utility-scale, renewable energy in our markets," said Google representative Niki Fenwick. "We want to buy the highest quality, most affordable renewable energy wherever we can and use the green credits."
Google already has a very large, 1.6-megawatt solar installation at its Mountain View, Calif., headquarters. But having the ability to buy and sell electricity the way utilities do gives Google the flexibility to use much larger amounts of renewable energy to offset the energy consumption of its operations.
"We don't have any concrete plans. We want the ability to buy and sell electricity in case it becomes part of our portfolio," Fenwick said.
Google is seeking to become a carbon-neutral company by improving the efficiency of its operations, including its energy-hungry data centers. It also has a program of purchasing "high-quality" carbon offsets and it has invested in a renewable energy companies through its philanthropic arm, Google.org.
Google.org has funded technology start-ups in solar, enhanced geothermal, and wind. It also developedPowerMeter, a Web-based home electricity monitoring application offered primarily through utilities.
Outside of those efforts, Google employees are active in exploring the intersection of IT and energy, such as ways to use a network of electric car batteries to stabilize grid frequency. Google also created a partnership with General Electric to lobby for policies to promote clean energy.
At an event to discuss U.S. energy policy last November, Google's director of energy and climate initiatives, Dan Reicher, also indicated that Google could get involved in financing large-scale renewable energy projects, according to reports.
Over the past two years, Google has been active in pushing clean energy and efficiency in a variety of ways without becoming directly involved in the business the way a utility is. Making a request with FERC to buy and sell energy for a company outside the utility business is a highly unusual move, experts told Energy & Environment Daily, which reported on Google Energy on Wednesday.
"It's interesting that they'd want to take on the burdens of being a FERC-regulated public utility," John Decker, a partner in the energy regulation practice at Washington, D.C.'s Vinson & Elkins, told Energy & Environment Daily. But, Decker said, "there's no substitute for actually being in the industry if you want to learn about it."
Martin LaMonica is a senior writer for CNET's Green Tech blog. He started at CNET News in 2002, covering IT and Web development. Before that, he was executive editor at IT publication InfoWorld.E-mail Martin.