Google Energy: A 21st Century Utility is Born

Last Updated Feb 19, 2010 7:30 PM EST

Federal regulators gave a Google (GOOG) subsidiary the OK to buy and sell bulk electricity just like your utility does -- one more way the Internet search engine giant is immersing itself in the energy industry.

This doesn't mean you're going to suddenly start getting electricity bills from Google. A number of other large power users like Safeway (SWY) Wal-Mart (WAL) and consumer-products maker Kimberly-Clark (KMB) have been given the same authority by the Federal Energy Regulatory Commission.

But that's not saying Google can't do more with its new found status.

The company's mission to become a carbon-neutral facility is well-known -- and this fits into its plan. The company's energy needs are massive -- equal to those of small towns, in fact -- and it want to make its data center as energy efficient as possible. Now Google can not only hedge its energy purchases, it can add its own renewables to the mix. For example, Google could add to the solar panels at its Mountain View, Calif. headquarters and simply sell off any extra capacity.

As for the future -- well, how about energy-management services? It's something Google has already invested in through, its philanthropic arm. So far, it's been directed at homes. Last year Google launched PowerMeter, a free software tool that works by taking information from a smart meter installed in your home, tracking energy consumption and then sending the data to a customers iGoogle homepage. Google is already working with 10 utilities and smart meter maker Itron on this program.

But, as Greentech Media also notes, Google could use its massive data centers to help manage power consumption in large commercial buildings. Google is well equipped to handle the complexity of managing a multiple energy-saving tasks -- from turning lights off when people leave a room to tracking daily habits and finding ways to use less energy.

The question of whether homeowners and businesses are willing to let Google even deeper into their comings and goings could be a major hurdle to pulling this strategy off. Of course, Google already knows so much -- if the company save you enough money, why not add energy use to the list?

See additional BNET Energy coverage of Google: