By 2030, Google plans to precisely match every electron of electricity flowing into its offices and data centers with one produced from a renewable source. If someone clicks on a search at 3 AM, Google will find the electricity to power that query from a battery, wind turbine, solar panel, hydroelectric dam, or some other carbon-free technology at that precise moment.
That goal, announced on Sept. 14, would make Google the first major company to run its entire business on carbon-free energy around the clock. If the history of renewable energy is any guide, this could have an industry-shifting impact on the market for energy storage and batteries.
Dan Finn-Foley, head of energy storage at energy research firm Wood Mackenzie Power & Renewables, compared Google’s plan to ordering eggs for breakfast. Today, most companies interested in clean energy go to the grocery store and buy their eggs (in this case, electricity) months or years in advance, through bulk purchase power agreements (PPAs). If a company wants green eggs, it contracts the renewable energy power directly. Or it can purchase so-called renewable energy credits (RECs) for a small premium, essentially financing the additional cost of generating renewable power. Breakfast accomplished.
Real-time matching, though, means securing that egg at the exact moment it’s laid. In 2017, Google said it purchased more than 7 billion kilowatt-hours of electricity, roughly the consumption of the state of Rhode Island. But only a portion—somewhat over half—was matched in real-time with data centers’ electricity consumption.
Matching generation with consumption presents an incredible logistical challenge for grids still reliant on fossil fuels. Wind and solar energy generation can’t be turned on with a flick of a switch. So what Google likely needs to pull off its vision is energy storage, and lots of it.
By installing utility-scale batteries—massive banks of lithium-ion cells similar to those in a laptop—uneven supplies of wind and solar power become a steady supply of carbon-free electricity. And because of Google’s size, its commitment to farm-to-table energy may actually shift the global market for energy storage.
“To meet the needs of Google, we’re talking about amounts that are unprecedented,” says Finn-Foley. The market for energy storage remains small, according to Wood Mackenzie, but it’s poised to explode since battery prices have dropped 85% over the past decade. Last year, more than 500 MW of new battery storage were added. By 2025, it’s expected to grow 14-fold to 7 gigawatts (GW) annually.
That scale of growth would mirror technology companies’ push to secure renewable power in the 2010s. In the last decade, corporate buyers financed a significant share of new renewable development, and corporate PPAs grew into a major player in the US electricity market. Since 2015, 23 GW of renewable energy have been procured by corporate customers and now represent 12% of all utility-scale wind and solar installed in the US (pdf).
While the technology industry led the charge—it financed 60% of renewable PPAs in 2014—its share has fallen to 29% even as electricity consumption rose because so many other industries followed suit.
With commercial and industrial customers consuming more than half of the electricity generated in the US, the potential impact is massive. Whether companies will follow Google’s lead into batteries is anyone’s guess. “Any organization could do this,” said Finn-Foley, since the technical and financial hurdles are significant but surmountable. “The advantage Google has that other companies don’t is the cultural will to do so.”