Google To Trade Power

The New York Times reported that Google has applied to FERC for approval to trade power given it’s need for such across all its businesses. The new entity is to be called Google Energy. (Google Power would sound too much like a late 60s peace rally).

In the article, Google said that “it did not have specific plans to become an energy trader and that its primary goal was to gain flexibility for buying more renewable energy for its power-hungry data centers.” I believe that they probably burn through lots of energy, but they can also just hedge their power exposure – it would be simpler and cleaner financially. In order to hedge, they would buy power through futures and swaps since they need the commodity.

If granted permission, Google “would be able to sell any surplus power that result from these or other initiatives.” My guess is they will always have surplus to sell.

What do you think?

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