by Thomas Nailen, MBA ’23
This article was written in response to a seminar given by Nick Pearson, Global Head of Energy Policy at Google, in an EDGE Seminar at Duke University’s Fuqua School of Business in Fall 2022. This article voices one student’s perspective and does not necessarily represent the views of either Duke University or the seminar speaker.
In our EDGE Seminar class this year, almost every speaker has commented directly on the United States’ transmission issue. At the end of 2021, transmission interconnection queues (the “waiting line” for large-scale energy projects to connect to the grid) held an estimated 1,900 projects. Those projects totaled an estimated 1,444 GW of potential capacity, including 1,357 GW (94%!) of renewable energy capacity (solar, wind, and storage). These bloated queues continue to grow while wait times in queue (which result in delays in renewable energy project deployment and ultimately decarbonization) continue to increase (from 2.1 years in 2010 to 3.7 years in 2021).[i]
Other energy market winds seem to be blowing towards a decarbonized future. Renewable energy costs continue to decline while natural gas markets are proving volatile. Grid-scale storage is being deployed across the U.S. to support renewables. State governments, corporations, and even some vertically integrated utilities are setting ambitious decarbonization goals. And, Congress delivered market participants a massive win with the Inflation Reduction Act (IRA) in the summer of 2022. While these developments, in aggregate, bolster optimism for our energy future, the U.S. energy transition cannot be successful without a significant investment in our transmission system. Princeton University’s Net-Zero America study estimated that in order to, “achieve a zero-carbon future by 2050,” high voltage transmission capacity in the U.S. will need to expand by 60% by 2030 (as compared to 2020) and triple by 2050. That would require an estimated $2.2 trillion in investment by 2050.[ii] With the sheer scale of investment needed, the woeful state of queue evaluation procedures, and complicated regional dynamics associated with interstate infrastructure projects, the transmission issue will take a coalition of well-resourced problem-solvers to overcome.
Nick Pearson, Google’s Global Head of Energy Policy, agreed that solving the transmission issue is of paramount importance to the nation and to Google itself. And for good reason… if Google hopes to achieve its 2030 goal of supplying its operations and data centers with 24/7 carbon free energy,[iii] it will need a robust and efficient transmission network to bring those diverse sources of renewable energy from their points of production to Google’s points of demand every second of every day.
So why shouldn’t Google join the transmission fight?
While there is precedent for Google to make moonshot infrastructure investments that are met with market skepticism (e.g., the rollout of Google Fiber), it seems far more likely that Google would enter the transmission space with software products as opposed to transmission lines development, so I will focus there. Google is, at its core, a data and information company. Google has used this core data competency to sell ads, but also to scale user-friendly products (YouTube and Android), map elaborate networks in real time (Google Maps), develop AI to replace accident prone humans (Waymo), and help end users manage energy consumption (Nest). Google could combine each of these experiences to develop an open access platform where transmission managers and customers are able to track and manage transmission utilization (and queues) across the country.
Transparency of transmission data is already federally mandated through FERC’s Open Access Same Time Information System (OASIS).[iv] Among other uses, grid managers use OASIS data to evaluate system impacts of adding generation sources to their networks (a key process in the previously mentioned long interconnection queues), while energy project developers use the data to evaluate markets for transmission capacity and site projects. While transmission providers must publish transmission data in real time, this data can be very difficult to interpret, in part because the industry preferred provider of OASIS data, OATI, has an outdated user interface. As such, it takes a highly trained transmission analyst or engineer to navigate, decipher, and act upon the available data. With Google’s track record in mapping complex systems, providing real-time updates, and building user friendly data portals, it could easily disrupt the open-access transmission data space… if it were motivated to enter.
What’s next for Google if it achieves its 24/7 carbon-free energy goal? My answer to Google’s current and future clean energy ambitions lies in transmission services. I’ve outlined one possible point of entry, but if Google were to develop any product that contributes to a more efficient utilization of our current transmission infrastructure, allows grid operators to more effectively evaluate projects in transmission queues, and ultimately accelerates the buildout of transmission lines in the U.S., Google would not only take a large step in achieving its internal energy goals, but it would also enable the decarbonization of its entire supply chain.
The three pillars of Google’s decarbonization strategy are: 1. Leading at Google, 2. Supporting Partners, and 3. Enabling Everyone.[v]
Launching “Google Transmission Services” would exemplify all three.