Google’s Rick Needham is Feeling Lucky About the Future of Sustainable Energy

Google’s Rick Needham is Feeling Lucky About the Future of Sustainable Energy

needham and car
Google's energy chief Rick Needham (left) has some lofty goals for the future of energy, including self-driving cars like the Google Car, shown here on a driver-less test drive (right). From Getty Images (left) and Wikipedia (right).

As the director of Google’s energy and sustainability team, Rick Needham leads the internet giant’s efforts to invest in renewable energy (they topped $1 billion in investments last year) and make the company’s offices more sustainable. He’s also an advisor to Google Ventures, the company’s venture fund that has invested in energy startups such as Silver Spring Networks, which develops smart grid technology, and Clean Power Finance, which provides funding for residential solar power. Needham spoke with to discuss his vision for the future of energy, how to make clean energy cheaper and why ride-sharing and self-driving cars make so much sense.

The following excerpts from our conversation have been lightly edited for length and clarity.

What do you—and Google—see as the biggest energy challenges we’re currently facing, both specifically for the company, and as a planet?

Coming at it from the perspective of the company, some of the energy challenges are always around making do with less—trying to reduce the amount of resources that you use. That can be in terms of efficiency, and hence saving costs. But beyond that, the bigger challenge is making sure the sources of the energy are more sustainable. For us, that has meant sourcing renewable energy where we can for our operations, whether that’s putting solar panels on our rooftops or procuring power for our data centers. 

When you broaden it out to the nation and the world, those same challenges are there. One of the challenges is: how do you actually get that infrastructure in place to allow you to have economical renewable energy available to all users? That’s a challenge in innovation, in deployment, and certainly in financing and economics. Some recent reports have indicated that the amount of investment required for new energy infrastructure, through 2030, will be something to the tune of $11 trillion, with a ‘T.’ That’s an enormous amount of investment that needs to be made to meet growing energy demands and meet them in a sustainable way.

As we look at efficiency and renewable energy for ourselves, back at the company level, we continue to innovate so that we are operating as efficiently as possible. We’ve been fanatics about that for more than a decade, and have saved over a $1 billion as part of those efficiency initiatives. 

On the procurement of renewable energy, that’s a challenge we continue to face, in trying to find economical sources. We’re now procuring over 300 megawatts of wind power, but frankly, as we continue to grow, we’ll have to spend more time and effort. And not even in driving our renewables to a higher percentage, but merely keeping pace with growth.

So what do you (and Google) see as some of the most promising solutions to this challenge of producing more renewable power and making it less expensive? How do you prioritize smaller-scale improvements in efficiency and bolder, “moonshot” types of energy ideas?

The fact is that solutions will come from both of those kinds of efforts. In terms of making significant changes due to innovations—things like more efficient solar cells; larger-scale turbines for offshore wind; energy storage solutions, which might finally become economical and allow larger integration of renewables; or electric vehicles that drive down the cost curve, perhaps with a battery technology that would be markedly better in terms of economics and energy density—all those things would be great ‘moonshot’ changes. Any sort of big innovation that could drive down energy costs to a tenth or a hundredth of [what] the cost it is today, that would change the game. So it’s certainly worthwhile to pursue those.

But I ultimately don’t view it as one or the other. Actually deploying new innovations over time has enabled the solar industry, for instance, to drive down the cost of photovoltaic panels, which have dropped something like 24 percent just in the last year, and dropping over 80 percent in the last five years. That’s incredible—most industries wish they could claim such a curve. And as you continue to execute and drive the prices down, and there’ll just be more and more places where the economics make sense and they can be deployed without incentive.

Some might argue, ‘why deploy what you have today when you know the technology of tomorrow will be that much more efficient?’ Well, if you wait forever, you don’t get the experience or volume or efficiency improvements that you can have today.

Why is Google, and Google Ventures, interested in the energy space in the first place? How has the company’s involvement in the area evolved over time?

For Google, energy and electricity is critical to our business. It’s the thing that makes Google happen at large scale. We deliver over 100 billion answers to searches every month, and serve up over 6 billion hours of video, and we have over a billion users. To deliver those millisecond-timed answers and streaming video takes a pretty sophisticated infrastructure. 

So we’ve asked what we can do to help provide those products and services in the most sustainable way. One is [to] operate efficiently, and another is to use renewable sources of power. We’ve gone through a bunch of potential pathways to do that, whether it’s signing power-purchase agreements, taking initiatives to actually procure power and then strip off the renewable energy credits and sell it back into the market, or directly working with utilities to provide that power to us. More recently, we’ve even worked with utilities to establish renewable energy tariffs, which would allow us to procure renewable energy through a utility.

With respect to Google Ventures, some of the investments they’ve made have been in this space, but they typically look at investments as ‘let’s find the best business opportunities to pursue with the best teams.’ Those don’t always happen to be in energy. But still, it’s tough to ignore energy, being arguably the largest industry in the world. There are certainly opportunities in that space, whether it’s a more efficient conversion of power [or] using assets more efficiently, like ride-sharing, or fuels that can be made in almost a carbon-negative way, that can be cost-effective and sustainable.

In terms of ride-sharing in particular, Google Ventures has recently invested in Sidecar and Uber. How does ride-sharing fit into your vision for energy and transportation in the future?

If you sit back and think about how people use cars today, it really doesn’t make a heck of a lot of sense. You have this vehicle, it’s several tons of metal and plastic, and it’s running down the road and just delivering one person from point A to point B, and then it sits there. Cars are idle almost all the time, and they’re a large expense, and an asset that’s frankly under-utilized. It causes our infrastructure (i.e. roads) to be, at times, very heavily utilized, and yet there are times when they’re empty.

Ride-sharing is a potential way to address some of that. Even more interesting, perhaps, is intelligently using vehicles that can drive you around and then go do something useful with their lives other than sitting on a piece of concrete, taking up space. So the potential for self-driving vehicles, perhaps, to be a part of an ecosystem that maximizes the utilization of both the car and the driving infrastructure, will also help to solve some of the big problems in our car-focused society. That could be in terms of accidents—as people play with their devices more and more—and just the ability of people to be productive with their time as they move from point A to point B.

How did you personally get involved in energy? What draws you to the field and makes you passionate about it?

My original entry into energy was as a submarine officer—I got to run what was basically a nuclear plant underwater. Then, I got involved in looking at innovations in energy, and methods of providing power in more sustainable ways. As part of a previous job, I looked at using multiple fuels, using an external combustion engine, applications of technologies like that. What gets me passionate is that it’s an area where, as a company, we can work on it and it can really benefit us, really set us up for the long-term to be successful.

What are the some of the challenges and failures that have helped teach Google lessons about energy and guide its vision for the future?

One lesson that was probably learned not just here, but throughout the industry, was that innovation in electricity generation is very different than innovation in software. There are hard physical assets that need to be developed and refined, and it requires lots of capital to get even to initial prototypes, which then need to be proven. At the end of the day, the power innovation products are providing a commodity—electricity—so those will take a long time and a lot of capital to prove themselves out. There are benefits, and if we had a system that was set up in a way to capture those benefits, with respect to sustainability, that could make the progress faster and easier. But right now, there are many places where the system isn’t yet set up to take advantage of that; i.e. carbon pricing for power—it doesn’t come into play in many places.

The other thing we’ve learned is related to one of our projects, which was focused on providing people access to their own energy usage information. We’re encouraged to see is that this concept has actually grown, and there’s an ecosystem being built around providing this information. And we look forward to a day of not just providing people with information on their own use, but more intelligently providing information on ways it can be improved, ways they can save money, save electricity, shift to renewables. Doing that in a way that doesn’t burden people, but thinks about it intelligently and is a smart partner in helping people make those decisions. It’s analogous to things we have in Google called Google Now, where an alert pops up that you should leave the office early because traffic is heavy. What if we had things like that related to energy and energy use? The lesson learned here is that it’s not just a matter of giving people information on their energy use, but something more than that—products and services that really provide a benefit.

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