Google inks major new offshore wind deal

Google announced its biggest deal yet to purchase offshore wind energy for its data centers in Europe, signing power purchase agreements to support two new wind farms off the coast of the Netherlands.

It’s part of Google’s plan to match all of its data center electricity consumption with clean energy generation on a 24/7 basis by 2030. To do that, the company will need to help get more renewable energy, including offshore wind, pulsing through power grids where it operates. It shared “the next step” of that plan for Europe today, where it says it’s adding more than 700 megawatts of clean energy capacity to the grid.

Much of that new capacity will come from the pair of new offshore wind farms in the Netherlands, where Google operates two of its 24 data centers. The power purchase agreements are with the CrossWind and Ecowende consortia, which are joint ventures between energy companies Shell and Eneco.

Along with Google’s previous power purchase agreements, the company says its Dutch data centers can hit 90 percent clean energy this year. Google also announced smaller deals to purchase renewable energy from onshore wind and solar farms in Italy, Poland, and Belgium.

Keep in mind that Google’s plans are to match its electricity use with carbon-free energy purchases. It’s not as if the data centers themselves will run exclusively on renewable energy, which makes up around 40 percent of the Netherland’s electricity production.

When tech companies say they run on renewable energy, what they usually mean is that they’re paying for Renewable Energy Certificates (RECs). A renewable energy generator can sell RECs for every megawatt-hour of electricity that a wind farm generates. This revenue source is supposed to support the development of new clean energy projects.

But the popularity of RECs has led to a conundrum. Tumbling prices for RECs mean they often don’t bring in enough money to incentivize the development of new renewable energy projects — which can defeat the purpose if you aren’t adding capacity to the grid.

Google and other tech companies including Microsoft are trying to overcome that problem by committing to purchasing carbon-free energy locally, hourly. Rather than matching their electricity consumption with renewable energy purchases on an annual basis, they’re committing to paying for renewable energy that’s generated nearby at the same time their systems are operating. This pushes the local power grid to increase its capacity for generating and storing clean energy around the clock.

The offshore wind industry, in particular, could certainly use the support as rising costs have forced developers to shutter projects in Europe and the US, where Google has the most data centers.