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Google's Renewed Cleantech Investment Binge

James Montgomery

google earthday06
Google Doodle for Earth Day 2006
This week the Internet giant Google revealed that in December it invested $75 million in Pattern Energy's (NASD:PEGI) 182-MW Panhandle 2 wind farm in Carson County, Texas, northeast of Amarillo, expected to be operational by the end of this year. Pattern will hold an 80 percent stake in the project, whose owners also include Google and two institutional tax equity investors, with Morgan Stanley providing construction and equity bridge loans and a letter of credit.

Google certainly has displayed a healthy appetite for Texas Panhandle wind energy. Last fall it committed to purchase all the output from EDF Renewable Energy's 240-MW Happy Hereford wind farm southwest of Amarillo. A year ago it plunked down $200 million in EDF's 161-MW Spinning Spur Wind Project in Oldham County, Texas, also west of Amarillo, which went operational in late 2012. (Note that EDF is taking over Spinning Spur III from Cielo Wind Power, in case Google is eyeing more investments for power circa 2015.)

This new deal adds yet another renewable energy feather to Google's cap, spanning projects and procurements from Texas to Finland. To date the company has committed more than a billion dollars in 15 renewable energy projects totaling more than 2 GW of electricity annually. That's enough to power all public elementary schools in New York, Oregon, and Wyoming, or 500,000 US homes, the company points out. Last year the Internet giant purchased over 727,000 MWh of renewable energy via long-term contracts, covering 22 percent of its total electricity consumption.

"We believe that corporations can be an important new source of capital for the renewable energy sector," writes Kojo Ako-Asare, Google's senior manager for corporate finance, in a blog post announcing the investment.

That's a neat segue to our next Google news item. While the company continues to lunch on renewable energy deals, this week it swallowed its biggest meal yet: $3.2 billion for Nest Labs, maker of the Nest smart thermostat and a newer line of smoke/CO2 alarms. (Sorry, anyone who predicted Nest as one of the most anticipated 2014 IPO offerings.) Here's a bit of sunshine for other cleantech investors: the deal means Nest's early VC investors are exiting with 15-20× multiples, including a $400 million payday for Kleiner Perkins Caufield & Byers.

Google has had an investment say in Nest since 2011, and the firm "has the business resources, global scale and platform reach to accelerate Nest growth across hardware, software and services," writes Fadell in a blog post. "Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We've had great momentum, but this is a rocket ship." An Apple-watching news site explores why Google, not Apple, is buying Nest: ultimately managing data about home usage is more in line with Google's business, while smaller hardware plays like chips has become Apple's pursuit. And Google's cash warchest gives it the freedom and wherewithal to take big shots like this.

The deal is the latest showcase in a $17 billion two-year push out of its core Web search and advertising platform and into hardware and software. It also underscores the increased competition between Google and Apple: the two already were at odds over smartphone platforms (iOS vs. Android), and nearly a third of Nest's 300 employees are Apple expats, including founder Tony Fadell who helped design the iPod. (One report suggests there's been even more direct competition and recruitment.)

Jim Montgomery is Associate Editor for RenewableEnergyWorld.com, covering the solar and wind beats. He previously was news editor for Solid State Technology and Photovoltaics World, and has covered semiconductor manufacturing and related industries, renewable energy and industrial lasers since 2003. His work has earned both internal awards and an Azbee Award from the American Society of Business Press Editors. Jim has 15 years of experience in producing websites and e-Newsletters in various technology.

This article was first published on RenewableEnergyWorld.com, and is reprinted with permission.



was posted on AltEnergyStocks.com.


       

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