The US Internet giants are forging ahead with investments in renewable energy production. These moves serve both to underpin their business development and burnish their CSR credentials.
Following their investments in fiber optics, connected cars and Internet access, the giants of Silicon Valley have found a new field for strategic competition: sustainable energy policy. Faced by the slow transition towards ‘greener’ power generation in the United States, these giants are now adopting long-term strategies to ensure secure energy supplies –and also take advantage of the fiscal incentives provided by the federal government – by getting into power generation themselves. While the number of reports detailing the huge environmental cost of trillions of online searches and social network interactions grows apace, the US giants are redoubling their efforts to enhance their corporate social responsibility profiles with an environmentally-friendlier energy performance. The latest news this week saw Facebook and Google announce a number of investments and joint ventures that will considerably increase their stake in wind and solar power facilities in the United States.
Ongoing, diversified investments in energy sources
Google has announced a new investment of over €80 million in partnership with private equity firm KKR to open six utility-scale solar plants, five in California and one in Arizona. These facilities will have the capacity to supply electricity to more than 17,000 households and will bring the company’s total investment in ‘green’ energy to over a billion dollars since 2010. Complementing these direct investments, Google is also stepping up efforts to reduce its carbon footprint by signing long-term power purchase agreements with number of solar and wind-power producers. Following this trend, which is also being embraced by Apple,Facebook has announced a partnership with a wind farm in Iowa, and in the same vein Microsoft recently signed a 20-year contract with a wind farm of similar capacity in Texas.
With these very sizeable investments, the major Internet firms appear to be moving towards becoming conglomerates playing an increasing role in the energy sector. With its Google Energy subsidiary, which has obtained authorization from the federal regulatory body to buy and sell on the primary electricity market, the online search giant now carries weight in this business. The company is mainly targeting areas with data centers and campuses in the vicinity with a view to supply these burgeoning needs directly, without increasing the company’s carbon footprint. This goal is guiding the development strategy and choice of energy partners.Meanwhile Apple has recently built a number of solar-panel complexes close to its data centers in North Carolina and Reno, Nevada. With the explosion of terminals in households and the amount of data stored in the Cloud, the web giants seem to have decided they need to keep one step ahead of federal policy – and of the traditional energy suppliers –at the same time boosting their image with customers who are becomingly increasingly concerned about the undesirable environmental impact of Internet use. Nowadays there are ratings agencies which monitor the social and environmental performanceof large companies and grade such ‘extra-financial’ aspects in a similar way to the purely financial credit ratings.GreenPeace has for several years been publishing ratings of the energy policies of the Information & Communication Technology sector leaders in its Cool IT Leaderboard. Its latest reports show a clear improvement in the positions of Apple and Facebook.