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Google's investment is roughly 20 percent of total costs; project will be build be subsidiary of Japan's Sharp

Hot off its lucky (or cursed?) thirteenth alternative energy investment announcement on Halloween Day, Google Inc. (GOOG) is back with the announcement [press release] of yet another new renewable energy investment, this time in a group of mid-size Californian solar plants.

I. Sharp and Google Tango to a Sunny Beat

Google's $80M USD and investment firm accompanies an additional investment from Kohlberg Kravis Roberts & Comp. L.P. (KKR) and a debt offering, to scrounge up $400M USD for six utility-scale solar plants capable of generating 132 MWP (peak Megawatts) of power, or 106 MWAC (Megawatts in consumer-ready alternating current, post transform from panel DC output) of consumer-ready power capacity.

The plants are being built by San Francisco, Calif.-based solar integration firm Recurrent Energy.  Recurrent Energy is a solid choice for a deployment partner as it's backed and owned by Japan's Sharp Corp. (TYO:6753).  Sharp was the Japan's largest supplier of photovoltaic (PV) (solar) panels in 2012 and the sixth largest supplier globally, according to market research firm IHS Inc. (IHS).  Sharp last year shipped a little over 1 GWAC (gigawatt) in 2013.

Reccurrent Energy
Recurrent Energy's Victor Phelan PV grid, located near San Bernardino, Calif., is one of six new plants funded by Google and KKR. [Image Source: Recurrent/Google]

And so far 2013 has been shaping up to be a great year for the Japanese electronics conglomerate, as far as solar power goes, with sales up nearly 81 percent [PDF] in Q2-Q3 2013 (Sharp's fiscal H1 2014) versus the same period a year ago.  Solar now accounts for 12.6 percent of Sharp's total revenue, up from 8.4 percent a year ago.  According to IHS's Q3 2013 report, Sharp is now in fourth place with 4.7 percent of the total market, fast becoming a success story amid gloomier 2013 performances from its Chinese rivals, who have struggled with defect and demand issues.

The new Sharp-supplied plants will be installed in a number of hot desert regions in the Southwest, including a plant in the High Desert near San Bernardino, Calif., which lies in the southeast near Nevada's southern and Arizona's western borders.  Each plant will produce roughly 22 MWP and 17.5 MWAC.

Sharp panel
Sharp is the world's fourth largest solar panel producer, thanks to gains in 2013. [Image Source: Sharp]

KKR/Google and their installer Recurrent Energy are gunning for a pretty aggressive installation schedule, completing the new plants in 2014.  They say the plants should be enough to power roughly 17,000 homes, based on average home usage statistics.

This is not Google and KKR's first tie-up with Recurrent Energy. A previous project in 2011 involved $94M USD from Google and roughly $95M from KKR for four identical installations by Recurrent Energy, which are currently providing 22 MWP/17.5 MWAC of solar for the Californian market.

II. Deep Wind, Solar Investments

Google to date has committed to 14 total solar power investments, totaling $1B USD, and yield roughly 2 GWAC of capacity.

In June Google struck a ten year agreement [press release] to power its Hamina, Finland data center with wind energy from the new Maervaara wind farm.  Maeravaara is being constructed by Sweden's O2 Vind AB (not to be confused with the telecommunications service provider) and uses 24 N117/3000 turbines, three-megawatt (AC capacity) 120 meter tall turbines from German turbine firm Nordex SE (ETR:NDX1).

Nordex N117/3000
The Nordex N117/3000, a cold-weather tolerant 3 MW large wind turbine for land use. [Image Source: Nordex]

Constructed in a stretch of windy Swedish timberland, the new turbines are rated for operation down to -20 ºC and incorporate anti-icing technologies to help them deal with operating 100 km north of the Polar Circle.  Google has the entire output of the Maervaara farm reserved through 2024.

Google Finland
Google's data center in Hamina, Finland will now get part of its power from a Swedish wind farm.
[Image Source: Google]

In September [press release] it signed another wind contract -- with the Happy Hereford wind farm in Amarillo, Texas.  The 240 MW (AC capacity) farm, which borders Oklahoma, will provide juice for Google's Mayes County, Okla. data center.  The wind farm was built by Chermac Energy Corp., a multi-state energy project firm owned by Native Americans.  The duration of the deal was not revealed, but it will begin when the plant goes online late 2014.

Google also has three other long term contracts, including deals with Oklahoma and Iowa wind farms.

The internet superpower has also been on a tear buying up long-term contracts for solar capacity or making investments in solar plants.  In October it partnered [press release] with Silver Ridge Power LLC -- the joint venture of The AES Corp. (AES) and private investment firm Riverstone LLC.  (Silver Ridge Power was formerly known as AES Power.)  Google is investing in a 265.7 MWAC (peak) PV plant which Silver Ridge Power is building in Imperial County.  

Mt. Signal Solar
On Halloween Google announced a $103M USD investment for Mt. Signal Solar. [Image Source: Google]

The plant is known as Mount Silver Solar or Imperial Valley Solar 1.  Under Google's $103M USD investment, Google will resell power to the local San Diego Gas & Electric Comp., a subsidiary of Sempra Energy (SRE).

III. Good Deed or Greenwashing?  You Decide

The Google RE<C (Renewable Energy Cheaper Than Coal) project kicked off in 2007.  Initial investments focused on emerging technologies, while recent investments have focused on more mature solar and wind power renewable energy projects.  Google in 2008 suggested that the entire U.S.'s electricity needs could be provided 100 percent from renewable sources by 2030.  

Google Green
Google stands steadfastly behind the alternative energy movement. [Image Source: Google]

Although it looks increasingly unlikely there's a chance of that dream coming true, Google has continued to plug away to reduce its so-called "carbon footprint" ever since.  Google claims that 34 percent of its substantial global power footprint now comes from renewable sources.

While it'd be difficult to fault Google's "Green" efforts on the efficiency side of the equation, its alternative energy investments and political support have evoked mixed reactions.  Some chalk the efforts up to nothing more than a bragging battle between Google and its rivals like Apple, Inc. (AAPL).  

Critics point out that Google can't actually use most of the power it buys as these power sources (like wind and solar) are too volatile for the steady power needs of Google's data centers.  They complain that Google is part of the problem for supporting national and state alternative energy commitments, such as California's demand that all utilities operating in state get 20 percent of their energy from alternative sources by 2020 (the 20 by 2020 pledge).

Renewable Stats
Google's efforts consist of a mix of efforts to reduce consumption (efficiency improvements) and investments in renewable power sources (source side).

Supporters, though, point out that these projects improve U.S. security (to an extent) by reducing reliance on volatile foreign oil sources in hostile regions such as Venezuela and the Middle East.  And these technologies have other benefits for mankind; for example efficient solar panels can be a valuable energy source for satellites.

They also argue that wind and solar are valuable technologies for when fossil fuel resources are exhausted -- which may be 1,000 years away or more, but will eventually happen.  Of course that perspective is not without controversy as well; some argue that other solutions (e.g. nuclear fission and synthetic hydrocarbon fuels from genetically modified microorganisms) are more practical in the somewhat near-term and yet other technologies (e.g. nuclear fusion) are more practical in the long term.

Sources: Google, Recurrent Energy, KKR





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In the right place
By Kiffberet on 11/18/2013 8:13:33 AM , Rating: 2
Glad to see they're building these things in the desert and Arctic circle.

For PV, desert is best, and for wind the arctic circle is perfect.

Out of sight for most of the population, so they can't complain too much, and in optimum locations.

In the UK, where there's not a great deal of guaranteed sun, I've seen fields of Solar Panels! In winter, the sun barely comes out, and in summer it's probably cloudy 1 out of 3 days.
Waste of time, but looks good on paper...




RE: In the right place
By mars2k on 11/18/2013 8:33:11 AM , Rating: 3
Ha - out of site out of mind eh…I wonder if those Filipino’s would mind a solar plant next door if it might have mitigated this last hurricane.
Photovoltaics do not need direct sun and can generate in diffused light. Further if a PV installation is designed correctly with the variable factored in and it makes economic sense then why not?
The world needs to get off the Carbon teet. Climate change is real, the acidification of our oceans is real and the human race is careening towards extinction due to aggressive ignorance and hubris.
Good for Google keep up the good work even if falls under the gaze of the occasional dilettante no matter h0w vapid


RE: In the right place
By Solandri on 11/18/2013 5:30:37 PM , Rating: 1
Hurricane frequency and strength is currently about the same as it was from 1935-1960.

http://rogerpielkejr.blogspot.com/2012/11/us-hurri...
http://www.gfdl.noaa.gov/simulation-of-hurricane-i...
http://coaps.fsu.edu/~maue/tropical/global_running...

(Read the linked PDF in Nature for Atlantic hurricanes in general, not just those that made landfall on the U.S.)

There was a big blip in the Atlantic in 2005, but the long-term average has been fairly normal. The "increase" in hurricane activity you think you see is more due to 1970-1990 being far below average in hurricane frequency and strength. You can see this in many charts purporting to show an increase in activity - they typically show Atlantic hurricanes starting around 1970, and ending around the 2005 blockbuster year.

Data before about 1960 becomes problematic because we didn't have global satellite coverage back then. Hurricanes could form and dissipate without people ever knowing about them. So simply counting number of storms doesn't give you an equal comparison between then and now. Which means in all likelihood the hurricane activity in 1935-1960 actually exceeded what we're experiencing now.


RE: In the right place
By Reclaimer77 on 11/18/2013 5:36:53 PM , Rating: 2
Don't even waste your time. Anyone who says we're "careening toward extinction" is insane and can't be reasoned with.


RE: In the right place
By maugrimtr on 11/19/2013 7:44:30 AM , Rating: 2
Careening towards extinction is obviously stupid. It would take a completely epic disaster to make us extinct. A good asteroid strike or the Sun turning into a Red Giant would fit the book. Not even an ice age would end our species - the walls of ice don't travel that far south.

However, complaining about renewables being used is also stupid. The sun shines and the wind blows. If we can take advantage of all that planetary energy economically, then why not? If you put aside "saving the planet" and "waiting for future technology" entirely, it's just common sense. Burning coal has a significant health impact and nuclear fission isn't quite there in terms of having a clear sustainable future (though it's obviously better than many options - look up how many peat burning plants exist and are being planned in Europe).


RE: In the right place
By lagomorpha on 11/18/2013 9:08:48 AM , Rating: 2
quote:
Out of sight for most of the population, so they can't complain too much,


That complaint always struck me as a bit strange. In some places windmills are a tourist attraction.

http://www.holland.com/uk/tourism/activities/tradi...

The modern windmills currently installed in Illinois might not have the charm of old Dutch windmills but I've never thought of them as ugly. Seems more like people have been trained to hate environmentalism and will make up any excuse to combat it even in the cases where it may make sense.


RE: In the right place
By Mitch101 on 11/18/2013 10:18:51 AM , Rating: 2
Its like the old commercials the cable companies used to run about having an ugly dish on your house but now its acceptable.


RE: In the right place
By euclidean on 11/18/2013 11:03:18 AM , Rating: 2
Your comment reminded me of this Daily Show interview...

http://articles.sun-sentinel.com/2011-08-03/news/s...

Hehe...


RE: In the right place
By Reclaimer77 on 11/18/2013 2:38:01 PM , Rating: 2
Auschwitz is a tourist attraction too. I wouldn't want to live there.

Large wind farms are obnoxiously loud. Its a quality of life issue for those nearby.


RE: In the right place
By papabear38 on 11/18/2013 5:32:00 PM , Rating: 2
If you are an epileptic, it is dangerous to live within the "flicker" (shadow) of the blades.


RE: In the right place
By Solandri on 11/18/2013 6:07:23 PM , Rating: 2
quote:
In the UK, where there's not a great deal of guaranteed sun, I've seen fields of Solar Panels! In winter, the sun barely comes out, and in summer it's probably cloudy 1 out of 3 days.
Waste of time, but looks good on paper...

The west coast of Scotland is actually one of the best spots in the world for wind power. I've seen capacity factors for some of the turbines there up around 60% (vs a typical 20%-25% for most land-based wind turbines). i.e. If you install 100 MW of turbines, over a year they will generate an average of 60 MW, vs 20-25 MW in other locations.

Use a power source because it makes the most sense, not because the concept sounds cool.


Total cost?
By FITCamaro on 11/18/2013 8:40:03 AM , Rating: 1
Is the total cost of the project $400 million or is just Google's investment $400 million?

We're losing gigawatts worth of electric generation due to the EPA forcing coal plants to shutter. Plants that generate 400-500MW of power. Replacing them with 100MW solar plants that only work 12-16 hours a day don't really do a lot to not cause a rise in power costs due to decreased supply. And then we still have to build other plants to generate power at night or when the wind isn't blowing.




RE: Total cost?
By JasonMick (blog) on 11/18/2013 9:23:47 AM , Rating: 2
The total cost of Google and KKR's contribution is $400M USD.

The average cost per watt of installed solar is about $4.00-4.50...

Source:
emp.lbl.gov/sites/all/files/lbnl-6350e.pdf

So I'm guessing the true cos_t is $100-200M more than that investment, money which is coming from somewhere else (Recurrent? Calif. taxpayers?)
quote:
We're losing gigawatts worth of electric generation due to the EPA forcing coal plants to shutter. Plants that generate 400-500MW of power. Replacing them with 100MW solar plants that only work 12-16 hours a day don't really do a lot to not cause a rise in power costs due to decreased supply. And then we still have to build other plants to generate power at night or when the wind isn't blowing.
True.

There are some benefits to reducing reliance on coal (better air quality == less asthma). However, clean modern nuclear plants is a better alternative.

If you poke around you see that the cost for MW for solar versus coal for a new plant is actually about the same. But the major difference is that's assuming 100 percent utilization -- which is never the case (not the case for coal either, but typically capacity for a coal plant is around 80%). In the Calif. desert (about the best case scenario, to be fair) you'll probably see 40-50 percent. So the true cost per MWh is probably a little less than double for solar what it'd cost with coal. That said, solar plants have no real variable operating cost, so some of this difference is expected to be negated over the plant lifetime.

Further, solar prices decreased from $14/watt to about $4/watt in 15 years (inflation adjusted), according to the report I previously listed.

I guess the take home is that solar isn't a horrible investment -- and may even become the cheapest form of power in a couple decades -- but it can't be the basis of the grid power due to inconsistent production.

Clean nuclear is a better idea for now, for most parts of the country, arguably.


RE: Total cost?
By Solandri on 11/18/2013 5:58:27 PM , Rating: 2
quote:
If you poke around you see that the cost for MW for solar versus coal for a new plant is actually about the same. But the major difference is that's assuming 100 percent utilization -- which is never the case (not the case for coal either, but typically capacity for a coal plant is around 80%). In the Calif. desert (about the best case scenario, to be fair) you'll probably see 40-50 percent. So the true cost per MWh is probably a little less than double for solar what it'd cost with coal

Capacity factor in the desert southwest U.S. is about 0.185, not 40%-50%. I've only heard figures that high if you use concentrators. This is the fraction of installed generating capacity you can actually realize after you factor in night, angle of the sun, and weather. So if you had 1000 MW of nameplate capacity, over a year it would on average generate 185 MW in the desert southwest.

This is pretty straightforward to calculate.
http://www.eia.gov/electricity/annual/html/epa_04_...
http://www.eia.gov/electricity/annual/html/epa_03_...

In 2011, the U.S. had 1.564 GW of solar capacity, which generated 1818 GWh of electricity. There are 8766 hours in a year, so simply divide generated power by capacity times 8766.

1818 / (1.564 * 8766) = 0.1326 capacity factor

Actual average capacity factor for the U.S. is about 0.145. The above calc comes up a little low because we're using the installed capacity at the end of 2011, instead of the average of 2010 and 2011.

If you do the same calc for the EU:
http://en.wikipedia.org/wiki/Solar_power_by_countr...

You get average(29.328, 51.36) = 40.344 GW installed capacity, 44,800 GWh produced. 44800 / (44.344*8766) = 0.1267 capacity factor

So solar ends up being about 4-5x more expensive per MWh generated.


RE: Total cost?
By JasonMick (blog) on 11/18/2013 8:33:17 PM , Rating: 2
quote:
Capacity factor in the desert southwest U.S. is about 0.185, not 40%-50%. I've only heard figures that high if you use concentrators. This is the fraction of installed generating capacity you can actually realize after you factor in night, angle of the sun, and weather. So if you had 1000 MW of nameplate capacity, over a year it would on average generate 185 MW in the desert southwest.
Right on, I was reviewing this part of my comment and you are correct.

This states a PV plant in Arizona as 19 percent efficient:
http://en.wikipedia.org/wiki/Capacity_factor

...based on a 2009 EIA review. So you're right... It's four times as expensive to deploy.

But the variable cost aspect I point out does apply, as does the air quality issues. The latter can be somewhat fixed with scrubbers, but again that ups the cost of coal power from a variable standpoint.

Anyhow, as I said, in two more decades if solar continues to linearly scale downward along its current trajectory it will reach a level where it's as cheap to deploy as coal in parts of the country where capacity is higher.

At that point it will becoming a leading solution, although you'd have to way the extra land use from a farm versus the ongoing costs of extra coal power (scrubbing, etc.).

.... arguably clean nuclear could be the best power source, though, if we properly exploit it. China's already building a bunch of newer modern reactors.... we're falling behind, by contrast.


RE: Total cost?
By FITCamaro on 11/19/2013 11:41:49 AM , Rating: 2
We do agree on nuclear. Too bad the administrations support of it thus far has largely been lip service.


Clean coal
By pies on 11/19/2013 1:29:37 PM , Rating: 2
The future of energy production may be (surprisingly) coal.
There are vast coal reserves all around the world.
Underground coal gasification is being actively researched all over the world. The process produces methane or other gas. Pollutants stay deep underground. CO2 is captured and stored underground too. This can be even better than thorium nuclear reactors as it doesn't require mining operations.




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