The Next Big Thing: The Greening of Silicon Valley

From the street, Adobe Systems’ San Jose headquarters looks like anyother collection of skyscrapers that dot the downtown of theself-proclaimed capital of Silicon Valley.

But ascend to a skyway that connects two of the software company’stowers and you’ll find a wind farm. Twenty vertical turbines thatresemble a modern art installation slowly rotate in the breeze thatblows through a six-floor plaza. Down in the parking garage, a dozenelectric car-charging stations have been set up. Adobe, which makes theubiquitous Flash player software, will install 18 more chargers thisyear to accommodate workers expected to be first in line when the Nissan Leaf, Chevrolet Volt, and other battery-powered vehicles roll intoSilicon Valley showrooms later this year.

Adobe also plans to install fuel cells — possibly using carbon neutralbiogas made from cow manure — to generate the three megawatts ofelectricity consumed by its downtown data centers. And since the company has limited roof space to install solar panels, it is consideringjoining a co-op that would purchase land outside the city for a solarfarm, according to Randy Kennedy, senior director for global workplacesolutions for Adobe.

“Once you’ve got your buildings running pretty energy efficient, youstart to look at the source of your energy, and that’s where we arenow,” says Kennedy, as the wind turbines slowly spin in the winter wind, generating about 24 kilowatts of electricity. “We’re a technologycompany and people have to step up and be early adopters in the greenarea or it won’t go anywhere.”

Silicon Valley companies have long gone green — racking up LEED pointsby installing everything from solar arrays to waterless urinals todemonstrate their environmental street cred to customers, shareholders, and their young, climate-change-aware workforces.

But for companies in the environmental vanguard, their corporatecampuses are laboratories to test new technologies to cut their carbonfootprints and improve the bottom line. As climate change legislationremains stalled in Congress, and California struggles through theregulatory complexities of implementing its own global warming law, much of the action has shifted to the private sector.

Case in point: The unveiling of Bloom Energy’s breakthrough fuel celltechnology in February. (Fuel cells generate energy without combustionby turning hydrogen, natural gas, biogas or other fuels into electricity through an electrochemical process.)

The Silicon Valley fuel cell manufacturer had spent eight years quietlydeveloping a solid oxide fuel cell to deliver electricity at competitive prices while minimizing greenhouse gas emissions. When Bloom finallylifted the curtain on its 100-kilowatt Bloom Energy Server in February,it revealed that Google, eBay, Wal-Mart, Federal Express, and otherFortune 500 heavyweights had already installed cube-shaped, SUV-sizeddevices at their Bay Area outposts.

“I’d love to see us have a whole data center running on this at somepoint when they’re ready,” Larry Page, Google’s co-founder, said at apress conference introducing the Bloom Energy Server. “Moving production of energy closer to where it’s used has a lot of environmental benefits and a lot of commercial benefits. It lets you choose your fuel source.”

The Bloom Energy Server’s ability to deliver electricity at pricescompetitive with traditional fossil fuels currently depends onsignificant state and federal subsidies. The long-term durability ofthe devices also remains to be proven. But the fact that some of theworld’s largest corporations have embraced the Bloom Box could be thekey to giving the company and its competitors the scale to drive downcosts and continue innovating.

No surprise that the first Bloom Box — which sells for $700,000 to$800,000 — was secretly plugged in at the Googleplex more than a yearago and hidden behind a fence. Bloom kept the development of its energyserver shielded from public view, and Google did not want it known thatit would be the first to use the Bloom Box.

The search giant’s interest in green technologies is pragmaticallyexperimental. Back in June 2007, Google flipped the switch on what wasthen the world’s largest corporate solar array, a 1.6-megawatt solarsystem that covered the roofs of its Mountain View, Calif.,headquarters. When I climbed the roof to take a look a few months later, I remarked to a Google executive that the panels were covered in dust.

The dirt was deliberate, she said. Google didn’t just want to drawelectricity from the panels, it wanted to test how they performed underdifferent conditions, including how often they would need to be washedto maximize energy production.

Likewise, Google’s fleet of converted plug-in hybrid Toyota Priuses –the campus features some 100 charging stations – have been deployed asrolling laboratories for how electric cars perform.

While other Silicon Valley companies have moved to secure renewablesources of energy, Google has created, in effect, its own utilitycompany, Google Energy, to procure electricity for its massive datacenters and other facilities. On Feb. 18, theFederal Energy Regulatory Commission approved Google Energy’s request to become, as it stated in its license application, “a power marketer,purchasing electricity and reselling it to wholesale customers.” Thecompany has said little about its plans for Google Energy. In itregulatory filings, Google stated that Google Energy “was formed toidentify and develop opportunities to contain and manage the cost ofenergy for Google.”

Safeway, Wal-Mart, and scores of other big corporations have also beenlicensed to act as in-house utilities for their operations. But GoogleEnergy has prompted much speculation about whether the company hadgreater ambitions in the energy field, given its big investments insolar power plant builders like BrightSource Energy and eSolar, its philanthropic arm. It’s all part of’sambition to make renewable energy competitive with coal.

“We’re looking to make investments in clean energy projects and toprocure green energy,” Dan Reicher, director of climatechange and energy programs, told me recently as Googlers bicycled by aconference room at the Googleplex, while other employees drove plug-inhybrid Priuses into solar panel-covered carports.

Reicher said that one way to do that would be as an equity investment in a generating plant somewhere. Another, he noted, is to become a bigbuyer of green electricity, especially for Google data centers aroundthe U.S. “This interest in procuring green electrons is part of what’sdriven Google Energy,” said Reicher.

Thus one could imagine a scenario where or Google Venture,its venture capital subsidiary, buys a solar power plant and signs adeal with Google Energy to supply the electricity to Google data centers and sell any surplus to other buyers, as is permitted by its government license.

Though not as large as Google, other Silicon Valley companies are moving quickly to adopt renewable sources of energy. Applied Materials, whichmakes solar cell manufacturing equipment, installed a massive solararray at its Silicon Valley headquarters, while Yahoo for years operated a biodiesel-powered shuttle bus for its employees. Some Silicon Valleycompanies have offered workers subsidies for the purchase of ToyotaPriuses and other hybrid cars.

At eBay’s sprawling San Jose headquarters, five Bloom Energy Servers sit outside a LEED Gold certified building. The Bloom Boxes are providingabout 15 percent of the eBay campus’ electricity, or about five times as much energy as generated by its 3,248 solar panels, according to AmySkoczlas Cole, director of the company’s Green Team.

And since the Bloom Energy Servers operate off the grid and supplyelectricity directly to the eBay campus, they reduce the load on theregional transmission system. (The energy servers presently run onnatural gas, but eBay is working on a deal to purchase biogas generatedfrom cow manure.) Install enough Bloom Boxes and utilities could forgobuilding expensive and polluting power plants that they fire up whendemand spikes on a hot day when everyone runs their air conditioners.Such “peaker” plants usually sit idle but for a couple days of the year, utility executives say.

EBay’s LEED building sports the de rigueur green bells andwhistles, such as recycled materials and energy efficient lighting. Butit’s the “bioswale” adjacent to the Bloom Boxes that is one of the mostnotable features. Designed to filter rainwater runoff from the buildings and reduce the burden on the public sewage system, the bioswaleresembles a wide sloping culvert where native grasses and layers of dirt and sand enable rain to percolate into the ground.

Skoczlas Cole says innovations such as the Bloom Energy Servers and thebioswale fit the “disruptive DNA” of Silicon Valley companies likeeBay’s, which are interested in embracing cutting-edge technology thatoffers big potential payoffs.

“This new disruptive technology made sense because the economics madesense, frankly,” she says, noting that state and federal incentives mean that eBay’s multi million-dollar investment in Bloom Boxes is expectedto pay for itself in three years.

And that may be the greenest innovation of all to come out of SiliconValley companies’ embrace of cutting-edge green technology. 



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