Finance, Industrial, Sourcing Renewables - March 20, 2024
Google, Microsoft Launch Initiative to Scale Clean Energy Tech
Google LLC and Microsoft Corporation announced they will work together across the electricity ecosystem to develop new business models and aggregate their demand for advanced clean electricity technologies.
The two tech companies will also work with Nucor Corporation on models that will be designed to accelerate the development of first-of-a-kind (FOAK) and early commercial projects, including advanced nuclear, next-generation geothermal, clean hydrogen, long-duration energy storage (LDES) and others, according to a statement.
The companies will start by issuing a RFI in several U.S. regions for potential projects in need of offtake, and encourage technology providers, developers, investors, utilities and others to participate.
According to the International Energy Agency firm, dispatchable clean electricity technologies and advanced energy storage systems are needed to cost-effectively decarbonize grids and help the world meet its growing electricity demand with carbon-free energy sources. These advanced clean electricity technologies can fill gaps in wind and solar production and support grid reliability — needs that today are still being met by fossil fuel generation.
Through the development of new commercial structures and the aggregation of demand from three of the world's largest energy buyers, this approach aims to reduce the risks for utilities and developers considering early commercial projects and enable the investments that are needed — ultimately helping bring these projects online by the early 2030s and reducing technology costs through repeated deployment.
The companies will initially focus on proving out the demand aggregation and procurement model through advanced technology pilot projects in the U.S. The companies will pilot a project delivery framework focused on three enabling levers for early commercial projects: signing offtake agreements for technologies that are still early on the cost curve, bringing a clear customer voice to policymakers and other stakeholders on broader long-term ecosystem improvements, and developing new enabling tariff structures in partnership with energy providers and utilities.
In addition to supporting innovative technologies that can help decarbonize electricity systems worldwide, this demand aggregation model will bring clear benefits to large energy buyers. Pooling demand enables buyers to offtake larger volumes of carbon-free electricity from a portfolio of plants, reducing project-specific development risk, and enables procurement efficiencies and shared learnings.
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