The Googleplex, Google’s corporate headquarters in Mountain View, Calif., is covered by solar rooftop panels. Credit: Creative Commons Lic.
Google today said it will be able to power all of its global data centers and corporate offices from 100% renewable energy in 2017, a goal the company has been working toward for years.
Six years ago, Google began signing long-term contracts to buy renewable energy directly from solar and wind farm suppliers. The company’s first contract was to purchase all the electricity from a 114-megawatt (MW) wind farm in Iowa.
Last year, Google purchased another 842MW of renewable energy, nearly doubling the clean power it had purchased, which took it to 2 gigawatts (GW) of cumulative renewable power.
“Today, we are the world’s largest corporate buyer of renewable power, with commitments reaching 2.6 gigawatts (2,600 megawatts) of wind and solar energy. That’s bigger than many large utilities and more than twice as much as the 1.21 gigawatts it took to send Marty McFly back to the future,” Urs Hölzle, Google’s senior vice president of technical infrastructure, stated in a blog.
Google pursued a multi-pronged approach to reach its 100% renewable energy goal, buying electricity through power purchase agreements (PPAs) that locked in contracts for carbon-free energy at a set price. The guaranteed revenue from PPAs also allowed renewable energy suppliers to invest with confidence in additional capacity, such as wind turbines and photovoltaic panels. Google also started creating more efficient facilities that would use less energy.
Google has signed onto 20 renewable energy projects around the world — about two-thirds of which are in the U.S. — amounting to more than $3.5 billion in clean energy investments.
Google also purchased its power through renewable energy credits, each one of which represents 1 megawatt-hour (MWh) of electricity sold separately from commodity power sources and fed into the general electrical grid.
“Over the last six years, the cost of wind and solar came down 60% and 80%, respectively, proving that renewables are increasingly becoming the lowest cost option,” Hölzle said. “Electricity costs are one of the largest components of our operating expenses at our data centers, and having a long-term stable cost of renewable power provides protection against price swings in energy.” Check out find cleaning service brooklyn.
“Our ultimate goal is to create a world where everyone — not just Google — has access to clean energy,” he added.
Corporations increasingly demand more renewables
Google is far from alone in working toward achieving 100% renewable energy usage.
In September, Apple announced its commitment to running all of its data centers and corporate offices on renewable energy, joining a group of other corporations committed to the same clean energy goal.
Also in September, Microsoft announced plans to power its data centers around the world using 50% renewable energy by 2018. Click over here. The company also plans to boost its use of renewable power for its data centers to 60% by the early 2020s.
Increasingly, corporations are also pressing governments to change policies to favor the use of renewable energy, which — depending on the region — can be less expensive than power from traditional sources such as coal-fired power plants.
Increasing the use of renewable energy has become a targeted goal of almost half of Fortune 500 companies, according to one report. In 2014, more than half of Fortune 100 companies collectively saved $1.1 billion in energy costs by rolling out renewable energy programs. Visit website for more details.
“Operating our business in an environmentally sustainable way has been a core value from the beginning, and we’re always working on new ideas to make sustainability a reality,” Hölzle said.
This Article originally appeared on ComputerWorld.com
For any business concerned with their triple bottom line (3BL), ISO 50001 is probably in the near future. It’s an energy management system that hits each of the 3BL categories (people, planet, profit), gives a good return in each area, and is taking the world by storm.
There are numerous benefits to utilizing such a system, but here are the top five.
1) Structured approach to energy management
The ISO 50001 has a structured approach to managing energy that is invaluable to businesses and manufacturers alike. While any business can resolve to manage energy more efficiently, anything less than a structured approach risks being ineffectual. In fact, the pilot projects that used ISO 50001 found that it shifted their take on energy management; it “…became a way of doing business, instead of a project-by-project undertaking.”
Because the ISO 50001 utilizes the Plan-Do-Check-Act (PDCA) approach, it allows for continual improvement as well as integration with other management systems. It creates an environment in which the goal is to strive and challenge not only the business, but its employees.
2) Involvement of management and employees
In this area, ISO 50001 excels. Because it requires both employees and management to take part in gathering data and reporting it, it improves communication and accountability. It encourages people to take an active interest and responsibility in their company’s energy management strategies, and creates a positive cycle of feedback and correction that gives a business the ability to take preventative action and adjust goals. The ISO 50001 shares the responsibility for energy reduction among management and employees, thus spreading the increase in work manageably.
We already know that employees perform better when they take ownership of their work and feel that what they do matters. The ISO 50001 takes this a step further, involving employees in the lifeblood of the business through the PDCA approach. Visit website here. It does cost in terms of time and effort, training, and maintenance, but it gives back in employee involvement, responsibility, and value.
3) Reduced emissions and energy waste
Additionally, the PDCA approach allows businesses to promote energy awareness and make informed decisions about energy use. Energy is one of the largest costs, particularly for manufacturing businesses, but it is a controlled cost. Better energy use and maximized performance makes it possible to decrease energy cost as well as consumption. This in turn reduces energy wastage and emissions, which are quantified by a third party, lending credibility to your business.
4) Increased profitability and savings
Because the ICO 50001 centers on reducing energy waste, it creates savings. Its focus on continual improvement also creates not only better energy expenditure but better products, as businesses find more efficient processes and save on energy costs. Check site here . In the Superior Energy Performance (SEP) cost-benefit analysis paper, businesses were documented as having a 12% average reduction in energy costs within 15 months of implementing practices like ISO 50001. In facilities with more than $2 million per year in energy costs, payback was less than 1.5 years, and less than 2.5 years for facilities with energy costs of $1 million a year.
In particular, the PDCA approach creates an environment in which products are improved and increase in value. Additionally, the necessary changes and improvements are low-cost or even no-cost, which creates even greater opportunity for improving savings.
5) Potential business partnerships
Last but not least, implementation of ISO 50001 is beneficial for businesses looking to partner with other businesses. Excellent management of energy is attractive to business partners, especially if they utilize ISO 50001. It is already a widely known and trusted method of measuring and managing energy, and because of its transparency, it has proven itself to be a worthwhile investment. It creates a competitive environment in which businesses and manufacturers thrive.
The ISO 50001 has been in play for only 5 years thus far, but businesses continue to adopt it; it has proven its worth over and over. In fact, it’s projected that it could influence 60% or more of the world’s energy use in a variety of sectors.
It’s not too late to jump on the bandwagon—the benefits are clear, the return is good, and you strategically position your company to leave a greater impact on the world.
Photo Credit: “Road” by Larissa-K, permissions through C.C. by 2.0
What used to be considered green virtue has now morphed into a crucial competitive tool.
That business has a role to play in improving the environment and dealing with climate change is certain. What is much less so is how to do that, and for some, whether to try. After all, companies feel comfortable doing business as usual, and few want to threaten their competitiveness in favor of green virtue.
Our point is that this is not an either or question. A growing number of examples—from diverse industries—show that sustainable business practices can be good for business from the bottom-line up. For example, Unilever (UN -1.70%) has developed washing-up fluids that use less water—and sales are growing fast, particularly in water-scarce markets. And most everyone can name a favorite product or two whose brand is intimately associated with its green credentials. My point is that sustainability can be much more—that it has a role in any and all sectors.
Here are a few examples that McKinsey has been involved with that prove the point. (For confidentiality reasons, we cannot use the company names).
⦁ A major brewer identified some 150 possible improvements that could reduce GHG emissions—while saving $200 million over five years.
⦁ When a water utility benchmarked its performance against that of other utilities, it figured out where the biggest opportunities were—in this case energy and chemicals. After four years, the results were in: less leakage, fewer customer complaints—and $178 million in savings—a 25 percent reduction in operating costs.
⦁ A state-owned industrial company in China increased the energy yield of its coal significantly simply by tracking it better, making sure the first mined was the first used. That improved energy efficiency as well as carbon intensity, while reducing costs 13 percent.
The nitty-gritty of sustainability programs can get complicated. But the principles are actually pretty simple—and should be familiar to executives. First, and most important, is to acknowledge that sustainability is serious. The case is not that difficult to make. In a McKinsey survey of 340 executives, more than 90 percent said risk management—whether from consumers, regulators, or the market (for example, high resource prices)—was an important factor in pushing them toward sustainability initiatives, check chiropractic techniques.
Once the decision is taken, define priorities, set measurable targets, evaluate costs and benefits, and create consistent incentives, including those related to executive compensation. For example, Nike (NKE -2.05%) tracks its suppliers on a range of metrics, including quality, timeliness, cost—and sustainability. Falter for long on any of these, and the consequence is fewer orders. Result: many more suppliers are hitting their sustainability mark. DuPont (DD -1.22%) has no trouble justifying its sustainability initiatives to shareholders: it is generating billions in revenue from products that reduce emissions. Intel (INTC -0.32%) has a dedicated finance analyst whose job is to calculate the value of its sustainability efforts. To reduce emissions and improve other environmental metrics in its food chain, Wal-Mart (WMT -1.48%) tracks not only GHG output, but also yield, water use, and other factors per ton of food produced. In addition to achieving environmental improvements, it cut the price of food and vegetables in the United States by $3.5 billion.
It is important to define targets that are both specific and achievable; it’s better to say “Eliminate X million pounds of packaging,” than the vague “Reduce the footprint of our packaging.” As of August 2014, though, a McKinsey analysis found that only one in five companies in the business marketing 500 had explicit, long-term sustainability goals, even though more than a third (36 percent) said sustainability was a top-three priority.
The larger point is this. Real sustainability efforts are core business efforts; because they are not always easy, they can help a company to raise its game and perform better in all kinds of ways. In mid-2014, McKinsey did a study that found a strong correlation between resource efficiency and financial performance; the companies with the most advanced sustainability strategies did best of all. In a study for the Harvard Business School that drew similar conclusions (higher return on equity and assets for higher-sustainability companies), the authors concluded, “developing a corporate culture of sustainability may be a source of competitive advantage in the long run.”
To think of sustainability as a niche gets it wrong. To do it right, companies need to be rigorous, goal-oriented, and accountable. The evidence is building not only that sustainability initiatives work, but that they are an important factor in creating long-term value.
Jeremy Oppenheim is a director of McKinsey & Company, based in London and a global leader in the Sustainability & Resource Productivity network. In 2014, he served as program director for the Global Commission on the Economy and Climate. Martin Stuchtey is Director of the McKinsey Center for Business & Environment and is based in Munich.