The Spin Cycle

Google and the Energy Space

Business | April 4, 2009

The Google founders and the CEO of gave a talk at the World Economic Forum's Annual General Meeting in Davos last year. The talk covered parts of the debate on global climate change and 3rd world poverty. Most interestingly the talk gave a number of details regarding the fairly new business venture for Google and their goal of RE<C.

RE<C is an acronym for Renewable Energy less-than Coal, which means developing electricity from renewable energy sources that will be cheaper than electricity produced from coal.

Google can say that they are playing around in the energy game partially because of their views on climate change but it should not be forgotten that one of Google's biggest expenses is energy. They are the modern day energy refiners. Naturally a move into the energy space makes a lot of business sense.

The beauty of RE<C is that the goal is very clear. The only way for renewable energy to succeed is to take away the only reason to still use dirty energy - cost. If renewable energy is cheaper you can be an evangelist and save money - that's a big win/win.

The Google founders are engineers at heart and they have an incredible record for entering markets that seem to have little room for competition and then decimating the competition with the use of innovation (search, webmail, maps, etc). This is a brand new field for them but the principles are the same. The majority of large energy companies have failed to innovate for a long time and they have grown fat on their success. Who better to knock them off their perch than the most successful engineers of our time?

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