‘From Promise to Action on Net Zero’ is a series of publications and events exploring how companies are translating net zero emissions goals into practice. This interview presents one of our discussions with senior executives responsible for delivering their companies’ climate ambitions.
Google is a global leader in the low carbon transition. Google was the first major company to reach carbon neutrality in 2007, and in 2017 it attained its goal of matching its energy use with 100 percent renewable energy purchases. In 2020, the company announced a new commitment to operate on 24/7 carbon-free energy in all its data centers and campuses worldwide by 2030.
Emily Farnworth, Global Director of Low Carbon Economy Transition at ERM, spoke with Michael Terrell, Head of Energy Market Strategy at Google. Michael leads the global energy market strategy and 24/7 carbon-free energy initiatives for Google’s data centers and global energy portfolio.
Emily Farnworth: What does your carbon-free energy goal mean to you?
Michael Terrell: Google’s carbon footprint has historically been most associated with electricity consumption in our data centers. Along the way, Google has undertaken commitments related to energy consumption and how we could improve it. In our data centers, we set a 100 percent renewable energy goal in 2012. We achieved it in 2017 and have every year since – but that is not our end goal.
Our end goal is complete decarbonization of our electricity consumption. In September 2020, Google announced a commitment to reach 24/7 carbon-free energy for our data centers and office campuses around the world by 2030.
The development of our 24/7 carbon-free energy goal was based on a decade of work and experience that built confidence in our ability to scale up clean energy across our company and achieve increasingly ambitious aspirations.
We are also working across our supply chain where we have committed to enable 5 GW of new clean energy deployment in key manufacturing regions.
What was the start of your decarbonization journey?
When we set our 100 percent renewable energy commitment, it was considered cutting edge given how difficult it was to buy renewable electricity at scale at that time. Now we have 5,500 MWs under agreement for data centers around the world.
In the early days, we found that carbon offsets were the main way to address our footprint. We knew this wasn’t a long term solution and looked for ways to purchase renewable energy directly. We signed our first wind power purchase agreement in 2010 and more followed. This helped us feel confident in setting a 100 percent renewable target.
On our current journey, Google is riding the wave of technology and innovations. We are seeing new policy developments for states and regions for new clean energy targets, with the expectation for the grid to ‘get cleaner’ over the next decade as well.
What were the primary drivers for setting your 24/7 carbon-free energy goal? How have you balanced your growth with your decarbonization ambitions?
We recognized that our operations have an environmental impact, and we wanted to find the best way we could mitigate or minimize this impact.
We are also lucky in that Google has strong employee and leadership commitments to address these issues, and the company has not been afraid to invest resources in employee time and effort, or to make financial commitments towards achieving our net zero goals.
Historically, Google has grown roughly 20 percent on average year over year. This factors into how we set future targets. We have developed experience scaling renewables, which enables us to achieve ambitious targets, even with the growth we are experiencing.
Currently we have data centers in about 21 markets around the world, and we are expecting to be in more by 2030.
Our 24/7 carbon-free target was based on more than a decade of work and experience that led us to believe that we can take on this carbon-free energy goal.
What key challenges have you experienced so far?
Existing policy structures in many of the electricity markets in which we operate have made achieving our clean energy goals difficult.
Rather than working within these structures, in some places we have looked to partner with utilities and governments to develop policies that provide access for all companies to buy clean energy and strengthen the market for clean energy more generally.
We have worked with others to change policy to create pathways for direct purchases in places like North Carolina and Georgia in the US. In Taiwan, Google worked with the government to amend the Electricity Act to allow corporations to purchase clean energy, which led to Google signing the first Power Purchase Agreement (PPA) in the country.
Changing policy takes time, but when you do it, it leads to broader change beyond just one company. One advantage of working with other companies through groups like REBA, Re-Source, and RE100 on a global scale is to drive change in the market and to let policy makers know there is very strong demand for corporates to tackle the problem to gain access to clean energy.
We also know that new technology approaches will be needed to run our facilities on 24/7 carbon-free energy, and we are evaluating how different technologies - including variable renewables, energy storage, and firm carbon-free energy technologies - can work together to help achieve our goals.
What is your advice to other companies that are currently going through this process?
Policy has been a big challenge, but the business case for clean energy has never been stronger. Clean energy today makes financial sense with fixed-price contracts.
Achieving internal buy-in by walking through the business and societal advantages that come with clean energy has been critical to translating our goals into concrete actions.
Realizing clean energy goals requires following your internal processes, taking your goals to leaders, finance, and operations, and walking them through the benefits and advantages. Getting buy-in from operations and finance was critical to quickly scaling up and doing deals for clean energy. We didn’t treat the initiative like a one-off, it was more like ‘This is how we are going to source power, how we will run the business, and these are our goals’.
What are good practices for getting beyond barriers?
Focus on what is unique about your footprint and find like-minded partners. Then help them to achieve their goals and develop the deeper solutions which lead to transformational change.
With climate change progressing and the need for a carbon-free economy becoming ever more pressing, we know we need to be taking even more aggressive action. Today, companies need to find their market niche and go big, focusing on transforming the energy system rather than following it.
We now need to look fundamentally at how we can drive to a carbon-free economy. Every company touches the economy in a certain way. If every company doubled down and went big, then we will be able to drive transformational change.
Google wants to work with partners who have similar problems. By working collaboratively with others in similar situations, we can better drive solutions and holistic change.
What do you think will be the broader challenges ahead on your journey to achieving net zero?
We have a long way to go on our journey to 24/7 carbon-free energy. We need to see stronger policies that support climate goals and promote a cleaner economy. There tends to be a focus on carbon policy, but energy policy is just as important given how it helps to structure markets and send signals.
If every sector steps up to the challenge, we will see new opportunities. Each sector needs to drill down to fundamental differentiators to determine what it should do to help drive systemic transformational change.
Companies must look at all parts of their operations to find areas to make a big impact. I feel that if Google doesn’t eventually drive change that’s 1000 times or more greater than our own carbon footprint, then we have failed.
So far Google has mostly been focused on our own electricity use and data centers; yet the way we touch and empower users may very well be our next big frontier.