Photo: Marcin WicharyIt’s getting a bit hard to keep up with all of Google’s green investments these days — $168 million put into a big solar power plant project one week; $100 million for the world’s largest wind farm the next.
But this week’s big money move — the third so far this month — is different. It also involves wind but is a power purchase agreement (known as a PPA in the utility trade) rather than a direct investment in a specific project.
The deal with wind developer NextEra Energy Resources was struck by Google Energy, a subsidiary of the search giant that has been licensed by the federal government to buy electricity on the wholesale market.
Essentially, Google Energy acts as a quasi-utility, signing long-term contracts for electricity. In this case, it has committed to a 20-year contract to buy the electricity generated by a 100.8-megawatt wind farm called Minco II that NextEra will build in Oklahoma, where a new Google data center is set to go online later this year.
“This 100.8 megawatt facility will be built as a direct result of our financial commitment and should be operational in late 2011,” Gary Demasi, of Google’s global infrastructure team, wrote on the company’s official blog.
“We’ve been exploring ways, such as this PPA, to reduce emissions further by increasing the amount of renewable energy we use to power our operations,” he added. “We purchase high-quality carbon offsets for any remaining emissions.”
The value of the power purchase agreement was not disclosed — typically such deals are kept in a black box for competitive reasons. The advantage of such a deal over a direct investment is that it assures bankers and other financiers that a project has a guaranteed market for the electricity. And Google gets to claim that clean energy even though it goes into the grid rather than directly to its facility.
The Oklahoma wind farm will be built this year, according to NextEra, the United States’ largest wind developer.
The deal is Google’s second power purchase agreement with NextEra. Last year, it signed a 20-year contract to buy electricity generated by a 114-megawatt Iowa wind farm.