Google on Friday announced a new renewable initiative that would see utilities offer renewable energy power for sale to companies. Google not only outlined its vision for the initiative (white paper, PDF), but it has put its money where its mouth is by announcing to start with an expansion of its Lenoir, N.C. data center.

Google has convinced its local electricity provider, Duke Energy, to pledge to the development of a new program for large companies that want to buy renewable power for their operations. Duke will be filing its plan with the state commission within 90 days.

The move makes sense: Google believes working directly with utility partners will help in finding solutions that will make more renewable energy available not to just itself but to other firms as well. Most utilities currently do not offer a renewable energy option, so that’s what Google is aiming to change.

In its white paper, Google outlines that a successful renewable energy tariff requires the following five general parameters:

  • Eligibility. The tariff should specify classes of customers that are eligible, with the expectation that, initially at least, it would apply to large commercial and industrial customers. The goal is to target large and growing electricity loads and match their demand with utility-scale solutions. Signing up for service under the renewable energy tariff should be a voluntary option for customers.
  • Integrated service. The tariff should provide an integrated service that includes: (1) electricity generated by dedicated renewable facilities, and (2) if needed, a supplemental “shaping” service from other (likely non-renewable) generation to fill in the gaps of variable renewable resources and ensure that customers receive continuous and reliable service. Thus, the tariff will eliminate many of the complexities of intermittent renewable energy production for customers.
  • Renewable generation resources. The tariff should give customers the option to designate and/or approve the renewable energy resource they wish to procure, in order to meet their individual requirements for additionality. To provide the greatest flexibility, generation should be supplied through one or more facilities that are either: (1) owned by the customer or by the utility, or (2) contracted by the customer or by the utility under a power purchase agreement.
  • Green attributes. All associated green energy attributes (e.g., RECs) should be transferred to the customer bundled with the power so that the customer can assure the REC is retired. The renewable energy tariff should result in additional power generation.
  • Pricing. Costs associated with the procurement and delivery of renewable energy should be passed on to participating customers at a rate reflecting the actual cost of service. Pricing should be transparent and any additional costs or fees should be specified at the outset so that the customer can make an informed choice about whether or not to participate.

Google’s reasoning is that a renewable energy option offers at least two advantages: companies that don’t have the ability or resources to pursue alternative approaches can start to participate, and companies can buy renewable energy on a larger scale. The challenges are also worth listing: utilities will need to work out the mechanics of the service within their local regulatory structure, state utility commissions will likely need to approve the programs, and cost-effective renewable projects are not exactly easy to find.

Google notes this is part of a broader push by the company. It has so far committed more than $1 billion to renewable energy project investments, signed agreements to procure wind power near its data centers, and installed solar panels at its corporate headquarters.

It’s not the only one pushing the envelope. In fact, this new industry has a lot to gain as competition between the big technology firms extends to the renewable energy business.

See also – Apple gets approval for 20MW solar farm, will power iCloud data center on 100% renewable energy and Facebook and the Cleantech Group seeking new ways to help people reduce their environmental impact

Top Image Credit: Michael & Christa Richert