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Google to invest $600M in Lenoir data center

Fri, 04/19/2013 - 4:42pm
MITCH WEISS - Associated Press - Associated Press

Google said Friday it will invest more than $600 million in its North Carolina data center and take part in a new renewable energy program being developed by Duke Energy.

The global technology giant will build a new facility onsite, bringing Google's total investment to more than $1.2 billion at its Caldwell County data center — one of the company's eight massive facilities.

The data center near Lenoir houses computer systems that support Google's Internet search engine and other services such as Gmail and YouTube.

"They are a valuable economic resource in the area and a great example of a company that prioritizes environmental stewardship," Gov. Pat McCrory said.

Google said it is committed to using renewable energy at its data centers — the reason it plans to participate in a new program Duke Energy is developing for large customers that want to buy renewable energy.

Duke Energy said it will make a regulatory filing proposing the program with the North Carolina Utilities Commission in the next 90 days.

"The new renewable energy program under development at Duke Energy will give customers like Google the option of offsetting some or all of their energy consumption with new renewable energy generated in this region," said Duke spokesman Jeff Brooks. "The new rate is voluntary and will be paid for entirely by those who elect to participate in this offering."

Brooks said the new option will not affect other customers' rates.

Gary Demasi, director of Google's infrastructure team, said the company is excited about Duke's plan.

"As more of the world moves online, demand for Google's services continues to grow — and we want our renewable energy options to grow with it," he said. Google said it operates some of the world most efficient data centers, and in 2007 made a voluntary commitment to become carbon neutral.

The pairing of the country's largest electric company with a new-economy juggernaut brings renewable energy further into the business mainstream, said Dan Fogel, a professor of business strategy at Wake Forest University. The proposal helps Duke by building a market for renewable energy that relies less on government incentives or requirements, and helps Google by aligning with other corporate initiatives on clean energy, Fogel said.

"Google, if you think about what their most important resource is, it's energy. It's done a lot of things lately that shows it actually is investing an enormous amount of money in energy solutions," he said. "Without managing energy, it's not going to be able to be effective in the future."

Fogel suspects Google's cooperation will prove to go beyond a buyer-seller relationship with Duke Energy.

But it's no guarantee North Carolina regulators will approve the experiment without knowing how much it will effect household consumers, Fogel said. The state Supreme Court ruled last week the utilities commission needed to reconsider a 7.2 percent Duke Energy rate increase approved last year because the regulators failed to weigh the impact on 1.8 million customers.

Robert Gruber, who heads the Utilities Commission division that represents consumers, said the Public Staff will check that Duke Energy will not shift costs to residential customers.

"Based on what we know, we don't think that's what's intended or would happen," Gruber said. "But if people want to pay more to make a contribution to their environmental footprint, that's fine with us. That's good."

Environmental group Greenpeace praised Google's decision to take part in the new program, saying it "shows what forward-thinking companies can accomplish when they are serious about powering their operations with clean energy."

"Before today, even large energy users in North Carolina were only offered dirty energy by Duke Energy: coal, nuclear and gas," said Greenpeace International senior IT analyst Gary Cook. "In living up to its commitment of powering 100 percent of its operations with renewable energy, Google has given Duke Energy the push it needed to offer a renewable tariff which could finally mean access to clean energy for Duke Energy's customers in North Carolina."

Google's announcement comes as Apple Inc. moves aggressively to power its three U.S. data centers — including in Maiden, about 30 miles from Lenoir — entirely from renewable energy sources.

The technology company is powering its North Carolina data center with a 100-acre solar farm, is building a second solar farm with a similar 20-megawatt output expected to generate power later this year, and has built an onsite 10-MW fuel cell installation that converts methane gas from landfills into stored electricity.

Apple's move to power the North Carolina data center as well as the company's others in California and Oregon with renewable energy followed protests by Greenpeace, which claimed the company was using too much electricity produced by coal.

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AP Business Writer Emery P. Dalesio in Raleigh contributed to this report.

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