Google Fails at Renewables, Even with Taxpayer Guarantees

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Google logoIn 2009 Google announced a project in which it would pursue a so-far elusive goal – to produce “Renewable Energy Cheaper Than Coal” (“RE<C” was Google’s acronym). Why the Internet search giant thought it could succeed where other more experienced and knowledgeable companies (like electric utilities and alternative energy businesses) have failed for many decades shows the level of arrogance reached at the upper management levels. Either that or it illustrated how much Google’s leaders sought to ingratiate themselves with the Obama administration by following its “Green jobs” agenda.

But last week the company announced it will end RE<C, as part of an effort under CEO Larry Page to eliminate a number of non-core projects, which it called “spring cleaning, out of season.”

“We’re in the process of shutting a number of products which haven’t had the impact we’d hoped for,” wrote Urs Hölzle, Senior Vice President of Operations, on the company’s blog.

Under RE<C, Google dedicated an engineering team to research and try to improve solar technology. Upon its 2009 announcement the company’s Green Energy Czar Bill Weihl told Reuters he expected “within a few years” that his people would be able to demonstrate technology that produces renewable energy cheaper than coal.

“It is even odds, more or less,” said Weihl, a Time magazine “hero of the environment,” at the time. “In three years, we could have multiple megawatts of plants out there.”

Now Weihl has left Google, saying only, “It’s time to move on and find something new.” But that is not before the company poured more than $850 million into renewable energy ventures. That included a $168 million investment in BrightSource Energy’s first large-scale solar project – the Ivanpah Solar Electric Generating System – which is under construction in California’s Mojave Desert.

“The investment makes business sense and will help ensure that one of the world’s largest solar energy projects is completed,” Google posted on its blog. “We’re excited about Ivanpah because our investment will help deploy a compelling solar energy technology that provides reliable clean energy, with the potential to significantly reduce costs on future projects.”

Unfortunately, just like every other solar investor, Google expected taxpayers to bear the burden of a $1.6 billion loan guarantee by the Department of Energy for Ivanpah. Meanwhile the formerly mainstream media wants you to believe that “clean technology” is the hot new thing in investments, as though government subsidies, tax breaks and mandates have nothing to do with it.

Compounding the problem are the inevitable obstacles to such a large-scale utility project, many of which are thrown up by the very environmentalists who demand the use of renewables in the first place. The primary concern with Ivanpah – and also other proposed solar projects for sun-rich California – is the protection of the desert tortoise. According to an East Bay (Calif.) Express report, federal authorities halted construction of the solar plant because more tortoises than expected were found at the site, and permits allowed only 38 of the species to be relocated and only three per year to be killed over the project’s three-year construction period.

“When it surfaced that the company was set to exceed those limits,” the Express reported, “the Bureau of Land Management, on whose land the plant is being built, stopped construction and commissioned a new biological assessment.”

The new study determined that 90 percent of non-adult tortoises would be killed per year, with 3,000 total to be disturbed and 3,344 acres of habitat permanently destroyed. Based upon those findings, the U.S. Fish and Wildlife Service demanded – as a condition for construction to continue – new standards for relocating tortoises, improved protections from predators, and “increased monitoring and fencing.” The San Jose Mercury-News reported that BrightSolar expects to spend $45 million “on everything from salaries for biologists to the purchase of thousands of acres of conservation habitat.” Just watch the great pains and expense the biologists go to to protect a single tortoise:

 

Still, some wildlife protection groups continue to oppose Ivanpah, as well as other planned projects. Laura Cunningham of Basin and Range Watch told the Mercury-News, “There’s so many companies submitting plans and filing for permits that it’s hard to keep track.”

As for Google, CEO Larry Page has apparently learned that finding a way to make renewables cheaper has to do with much more than just the technology. Wind and solar are not efficient, cannot handle baseload electricity demand, and they require vast expanses of land to generate significant power.

“If there were just one [proposed plant], we could deal with that,” said John Hiatt, a Las Vegas-based environmental activist, to the Christian Science Monitor. “But we are looking at essentially every valley that is not protected as a national monument or park as being a potential site for solar. It will be the industrialization of the Mojave Desert.”

And Google has determined its efforts to make renewable energy “cheaper than coal” no longer make “business sense” – even generous protections of billions of dollars in taxpayer loan guarantees cannot make it work. It never did make business sense – the company never had the expertise or the core function to properly explore the production of electricity, much less transform a technology that has never worked in history on a mass scale. That’s why shareholders’ and taxpayers’ money should not be put at risk for such unproven, speculative ventures.

Companies like Google and Walmart, who have forayed heavily into renewable energy production, should stick to what they do best. Let the experts figure out what type of energy is deliverable at cheapest price, and let the hardheaded dream-chasers keep throwing their own money away on wind and solar.

Paul Chesser is an associate fellow for the National Legal and Policy Center.