Google Will Finance Enhanced Geothermal

Expect Google.org to make investments in the next couple of months in enhanced geothermal energy, says Dan Reicher, the Internet giant's director of climate change and energy initiatives.

Google's philanthropic arm is in talks with universities on funding basic research into tapping into the vast stores of energy underground, Reicher said at a two-day energy summit sponsored by the National Academy of Sciences. He said it also expects to finance companies that are working toward advances in this form of renewable energy.

A description of enhanced geothermal, graphics that show how it works, and a map of its potential can be found with this story in U.S. News.
Google announced its "renewable energy cheaper than coal" initiative late last year, but this is the clearest signal yet that the company is poised to add enhanced geothermal to its investment portfolio.

So far, Google's program has made $10 million investments in two companies that seek to produce renewable energy cheaper than coal: eSolar, a concentrating solar thermal power firm, and Makani Power, which seeks to develop ultra-high-altitude wind power. Reicher said tapping into wind power at 3,000 or even 10,000 feet up is "admittedly very high risk" but fits in well with Google's game plan on renewable energy investments.

"We don't have the constraints of venture capital firms, with the usual three-to-six-year exit strategy and need for return," Reicher says. "We're looking for higher-risk, higher-payoff investments." He also said Google.org is likely to invest in commercialization of cellulosic ethanol—another example of a promising technology that has a hard time getting out of the so-called Valley of Death, development of risky, first-of-a-kind plants.

Reicher also addressed why Google is engaged in the issue of renewable energy. As a large user of electricity, Google has aimed to purchase green resources and has often found them not available or prohibitively expensive.

"There's a great deal of optimism about renewable energy, great engagement of the public, and interest of the investment community," Reicher says. "There needs to be a fundamental change in the cost structure of renewables if we expect them to compete. And let's talk about the competitive landscape—first and foremost about coal. The aim has to be to make renewable energy competitive with coal and to do it in years, not decades."

to the source

Google’s Next Frontier: Renewable Energy

SAN FRANCISCO, Nov. 27 — Google, the Internet company with a seemingly limitless source of revenue, plans to get into the business of finding limitless sources of energy.

The company, based in Mountain View, Calif., announced Tuesday that it intended to develop and help stimulate the creation of renewable energy technologies that were cheaper than coal-generated power.

Google said it would spend hundreds of millions of dollars, part of that to hire engineers and energy experts to investigate alternative energies like solar, geothermal and wind power. The effort is aimed at reducing Google’s own mounting energy costs to run its vast data centers, while also fighting climate change and helping to reduce the world’s dependence on fossil fuels.
“We see technologies we think can mature into very capable industries that can generate electricity cheaper than coal,” said Larry Page, a Google founder and president of products, “and we don’t see people talking about that as much as we would like.”

The initiative, which Google is calling REBear Stearns agreed that “the headlines were a little scary at first” and said investors were initially worried that this was another example of Google “trying to bite off more than they can chew.”

But Google’s stock closed up more than 1 percent Tuesday in a higher market, Mr. Peck said, when investors ”realized this is more of a Google.org initiative and backed off.”

Mr. Page, in an interview, said that failing to investigate new businesses could hurt Google more than any potential distraction. “If you look at companies that don’t do anything new,” he said, “they are guaranteed never to get bigger. They miss a lot of opportunities and they miss the next big things.”

As part of the initiative, executives at Google.org said they are working with two companies that have “promising, scalable energy technologies.” One of these, eSolar, based in Pasadena, Calif., uses thousands of small mirrors to concentrate sunlight and generate steam that powers electric generators. The other, Makani Power, of Alameda, Calif., is developing wind turbines that will run on powerful and generally more predictable winds at high altitudes.

In a conference call Tuesday with reporters, Sergey Brin, Google’s other founder and president of technology, said the effort was motivated in part by the company’s frustrating search for clean, cheap energy alternatives.

“It’s very hard to find options that aren’t coal-based or other dirty technologies,” he said. “We don’t feel good about being in that situation as a company. We feel hypocritical. We want to make investments happen so there will be alternatives for us to use down the road.” Both founders declined to specify what the company spends on energy.

Idealism is hardly new at Google. In their Letter from the Founders before the company’s 2004 initial public stock offering, Mr. Page and Mr. Brin wrote: “Our goal is to develop services that significantly improve the lives of as many people as possible. In pursuing this goal, we may do things that we believe have a positive impact on the world, even if the near term financial returns are not obvious.”

Mr. Rohan of RBC Capital Markets said that the returns were not obvious. “The only positive byproduct of this project that would be anything other than environmental,” he said, “is that it might make Google managers and executives even prouder of the fact that they work there, and it may help retain key employees who think their goal is to do good in the world. But I’m really stretching.”

Google is only the latest Fortune 500 company to embrace green technologies. Also Tuesday, Hewlett-Packard said it would install a one-megawatt solar electric power system at its manufacturing plant in San Diego, and buy 80 gigawatt-hours of wind energy in Ireland next year. H.P. said that together, the agreements would save it around $800,000 in energy costs.




By BRAD STONE
Published: November 28, 2007

Enhanced geothermal attracting $$$ in North America

Scandinavian financial services and investment giant Glitnir opened its New York office today, which will be headquarters to its U.S. subsidiary Glitnir Capital Corp.

Why the heck is this significant or worthy of a post? Part of the reason Glitnir is setting up shop in the United States is because of what it considers "America's huge geothermal energy potential."

And it's all baseload, baby.

The way this Icelandic investor sees it, the U.S. has the potential for a six-fold increase in its installed geothermal capacity, which would double existing global capacity. "Glitnir estimates that investments of $9.5 billion (U.S.) are required in projects currently under development, and that further $29.9 billion are needed between now and 2025 to develop and harness future resources," according to a company release. Obviously, Glitnir wants to apply its experiences from Norway and Iceland (an established geothermal superpower, you could say) and neighbouring countries to opportunities in the United States, and is prepared to inject a large part of the necessary capital. "Some smaller companies are lacking financial muscle to fully develop projects with potential to be profitable. Therefore, Glitnir expects considerable consolidation in the industry over the next few years."

According to a report from Dow Jones: "The firm is readying a formal announcement of a financing deal of more than $10 million behind Iceland America Energy Inc., a geothermal specialist with a deal to provide energy to PG&E through the Truckhaven project in California... Other recent deals include a $19 million financing of Western GeoPower Corp. (of Vancouver), a $23 million financing round for ThermaSource in Santa Rosa, Calif., and a $20 million debt round to help Nevada Geothermal Power Inc. conduct drilling operations."

Reuters reports that Glitnir plans to spend $1 billion on U.S. geothermal energy projects over the next five years, what it considers to be about 10 per cent of a market that it brands the "sleeping beauty of sustainable energy."

In a different press release, the company seems to expand its interest to the larger North American market -- i.e. Canada as well. "We see a considerable geothermal energy potential in 82 countries worldwide -- including the USA and Canada," said Arni Magnusson, managing director of Glitnir Global Sustainable Energy. I've since e-mailed the company to get clarification on its position regarding Canada. Perhaps it has its eye on oil sands opportunities. Perhaps more... will be interesting to get some insight on this. I'll keep you all posted.

The bottom line is that it's exciting to see some major money flowing to this area, backed by experience and know-how (keep in mind we're also seeing folks like Khosla investing in this area). Geothermal promises to be an important slice -- along with solar PV, solar thermal, wave energy, wind and hydroelectric -- of the overall clean energy needs of the continent.

by Tyler on Wed 05 Sep 2007