Google’s data center power strategy attracts attention

Google may have signed on to President Trump’s weak power pledge, but it’s clear that the company began working on a framework for powering its data centers months ago.

Google announced Thursday that it is working with Michigan utility DTE to add 2.7 gigawatts of “new resources” in the Detroit suburbs to power new data centers in the area. The deal mimics a deal signed last month with Xcel Energy to build a data center in Minnesota, although some details are still vague at this point. This is how Google will develop new capacity for future data centers.

The new plan includes 1.6 gigawatts of solar power, 400 megawatts of four-hour energy storage, 50 megawatts of long-term energy storage, and 300 megawatts of “additional clean resources,” a vague term that could mean anything from wind and hydro to nuclear and geothermal.

TechCrunch sent a number of questions to Google spokespeople, and they responded with some details, but it’s clear there are many parts of this proposal that haven’t been fleshed out or fully disclosed yet. So does “clean resources” include natural gas? No response yet.

The remaining 350 MW of the 2.7 GW contract will be subject to demand response, where large electricity users reduce their usage over a short period of time. We don’t yet know what form that will take. Google may be looking for companies to adjust its power demand at certain times of the day, or it could shut down its own data centers if the power grid becomes strained.

The deal with DTE will also utilize clean transition tariffs, which Google has been refining over the past year or so. This rate was previously used in Google’s agreement with Xcel Energy. The idea is to allow Google to pay a premium for specifying the type of electricity it wants to install, and to encourage power companies to incorporate such technology into their long-term plans. Previous instruments such as power purchase agreements were often treated by utilities as one-offs.

Google also announced a $10 million energy impact fund aimed at lowering utility costs through things like insulating homes. With Google’s name on it, it sounds like an energy efficiency program run by a utility company. It remains to be seen whether $10 million will be enough to allay public concerns about rising power prices.

This is the second “Bring your own power” package promoted by Google, but it’s unlikely to be the last. In many ways, it’s not all that different from how the company has run in the past. Admittedly, this pricing system is relatively new, but Google has continued to invest in and develop new generation capacity since pledging to use 100% carbon-free electricity seven years ago.

The difference is that those projects tend to be announced on their own timelines. Now we are seeing the opposite. An ongoing power project will be announced along with a new data center. Smart marketing or more? We’ll find out in a few years.