Google's Vertically Integrated Green Energy

Google EnergyGoogle’s announcement last week that it will work to produce Renewable Energy Cheaper than Coal” will prove to be the foundation of the massively vertically integrated Google of tomorrow. Om’s post today explains how “it makes perfect sense for Google to build their own servers, storage systems, Internet switches and perhaps, sometime in the future, even optical transport systems.”

However, all of this techno-customization is for naught without power in the form of cheap electricity. So, extending that thought process further, it makes perfect sense for Google to build its own cheap, clean power generation. Power costs for data centers can make up 48 percent of a business’s IT budget, a recent Gartner report estimates.

Gartner has released a series of reports on the mounting operational costs of data centers, which are increasingly squeezed by power and space constraints, and the numbers are serious. “By 2011, more than 70 percent of U.S. enterprise data centers will face tangible disruptions related to energy consumption, floor space, and/or costs.” And for those that can afford to power their gear, the price tag will be painful — for two servers in a rack the operational cost will be is $112.13 per square foot, for six servers it’s $420.48 per square foot, and for 12 blade servers it will run $1,261.44 per square foot, Gartner estimates.

This comes when Data Center Knowledge has made a connection between a permit for 38 two-megawatt diesel backup generators and the hundreds of thousands of square feet of data centers Google is building in Council Bluffs, Iowa. Google has other large data center construction projects going on in the Carolinas and Oklahoma. All of these centers will be buying massive amounts of energy from utilities and with every new server that comes online the need for that gigawatt goal of cheap, clean energy gets greater.

At Gartner’s recent Data Center Symposium, an entire day was devoted to “greening” the data center. Large corporations are looking to reduce their data center energy costs; Big Blue, for example, is making moves to “combat the data center energy crisis” in the form of $1 billion for its “Project Big Green.”

While its competitors are focusing exclusively on lowering the energy demands of their servers, Google is attacking the problem from another angle entirely — energy production. What if Google was able to produce all of the power it needed at a cost less than it is currently paying? Google is quite serious about achieving this, saying in their RE Less Than C announcement that they intend to generate their clean gigawatt “in years, not decades.” That gigawatt is enough to power the city of San Francisco and could help Google coast through projected data center energy hiccups. Google might even have enough power to bail out its competitors — at a price.