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

Sustainable Energy
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 Smithsonian.com 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.