Google’s Alphabet is making strides towards its zero-carbon objectives by teaming up with NV Energy to provide its Nevada data centers with geothermal electricity. This collaboration aims to introduce 115 megawatts of carbon-free geothermal power into the grid over the next six years. However, the agreement is subject to approval from state utility regulators. Let’s delve into the specifics here: Google and NV Energy Join Forces to Boost Clean Power 25x with CTT
From a regulatory standpoint, Google’s alliance with NV Energy, a subsidiary of Berkshire Hathaway, is based on a “Clean Transition Tariff” (CTT) to secure 115MW of renewable energy from a geothermal power plant operated by Fervo Energy. Notably, Fervo Energy initiated a pilot program with Google in 2021 and is now gearing up to significantly increase its supply to meet Google’s escalating demand for renewable energy. The company has been collaborating with partners nationwide to develop a scalable approach for utilities and large energy users to invest in clean firm capacity, aiming to expedite the commercial deployment of advanced clean technologies.
The Google-NV Energy deal is set to amplify geothermal capacity by approximately 25 times. This expansion will bring more round-the-clock carbon-free energy to the local grid, supporting Google’s data center operations such as AI and cloud computing in Nevada.
The Clean Transition Tariff (CTT) facilitates long-term energy agreements between utilities and customers, fostering investments in new projects that supply clean power to the grid. This, in turn, enhances clean energy capacity and bolsters grid reliability, enabling customers to meet their increasing power demands with 24/7 carbon-free energy. Customers stand to gain long-term benefits of improved clean and reliable power through their existing utility connections. Amanda Peterson Corio, Global Head of Data Center Energy, and Briana Kobor, Head of Energy Market Innovation at Google, emphasized in a Google blog post that the CTT structure, if widely adopted across U.S. markets, can expand clean energy capacity, enhance grid reliability, accelerate the implementation of new technologies necessary for clean industrial growth, and bring the economic benefits of clean energy to communities nationwide.
Amanda and Briana further revealed that many companies secure clean energy, primarily wind and solar, through power purchase agreements (PPAs) with project developers. Google has been a frontrunner in this successful model. However, they highlighted the limitations of PPAs, such as the lack of integration with broader grid planning and utility investment processes, and the inconsistency in solar and wind energy availability due to weather variability. To achieve fully decarbonized electricity systems, technologies capable of providing clean power at any time, known as “clean firm capacity,” are essential. However, the development of such technologies is still in its early stages due to regulatory challenges and significant cost factors. Consequently, customers often resort to fossil fuels for consistent power when renewables fall short. Google advocates for leveraging 24/7 carbon-free energy technologies to address the increasing demands of local grids through a streamlined approach to investing in clean energy projects that offer firm capacity.
Based on the affirmative statements made by Google officials, it is evident that Google’s CTT is a game-changer for clean energy investment. Google asserts that the CTT will enhance the clean energy transition by empowering companies like NV Energy to receive direct funding for investment in new technologies, setting it apart from traditional power purchase agreements (PPAs) and assisting Google in offsetting its emissions. In 2022, Google secured contracts for approximately 2.8 GW of clean energy generation capacity, the highest ever. Google’s latest environmental report indicates that 64% of its global operations utilize carbon-free energy sources such as wind and solar. The deal with NV Energy is a strategic move to increase this percentage, underscoring Google’s commitment to its clean energy objectives.
In Nevada’s regulated power markets, companies encounter challenges in sourcing entirely clean energy directly from generators. This groundbreaking partnership between Google and NV Energy tackles this issue by integrating Google into NV Energy’s power generation through the CTT. Doug Cannon, president and CEO of NV Energy, emphasized the potential of this collaboration, stating that the ability to introduce clean, firm energy technology like enhanced geothermal onto Nevada’s grid at this scale is remarkable. This innovative proposal, if approved, will not be funded by NV Energy’s other customers but will ensure that all customers benefit from cleaner, greener energy resources. It serves as a blueprint for other utilities and large customers in Nevada to expedite their clean energy goals.
Nevada consumes six times more energy than it produces, partly due to its limited production of natural gas and crude oil and absence of coal mining. Geothermal energy, which harnesses naturally occurring underground heat to generate electricity, holds significant promise in Nevada. According to the US Energy Information Administration (US EIA), Nevada accounted for 26% of the nation’s utility-scale electricity generation from geothermal energy in 2023, with only California generating more. Geothermal resources contribute to about 10% of Nevada’s total electricity generation. The pivotal agreement with NV Energy integrates advanced geothermal projects, delivering carbon-free electricity to power Google’s data centers. Google continues to collaborate with utilities, regulators, and energy customers to drive investments in clean energy and advanced technologies.
