SAN FRANCISCO - Google Inc., whose corporate motto is "don't be evil," created a research group to develop cheaper renewable energy sources, focusing on solar, wind, and other alternative forms of power.
Google, the owner of the most-used Internet search engine, said yesterday it's hiring engineers and energy experts to lead a process that may cost hundreds of millions of dollars.
The project, called Renewable Energy Cheaper Than Coal, is meant first to help Google cut its energy costs and then to offer customers cheaper power. It follows initiatives this year to maximize the efficiency of its data centers, which account for most of the energy Google consumes.
"We're a large consumer of energy due to our data centers, so we're a natural customer," Larry Page, Google's cofounder, said. "We see opportunities to make significant investments that generate positive returns."
Investors might worry about the company's "long-term focus" and questioned whether the project was a good fit for the company, said Jordan Rohan, an analyst at RBC Capital Markets in New York. Google makes 99 percent of its revenue selling ads.
"What the heck are they doing? It boggles the mind," said Rohan, who advises buying Google shares. "This makes me worry about Google's priorities."
Google rose $7.57 to $673.57 in Nasdaq Stock Market trading. The shares have gained 46 percent this year.
Through internal development and investments in other companies, Google expects to generate revenue in the alternative-energy market. Its philanthropic arm, Google.org, will make grants to companies, laboratories, and universities working on related projects, the company said.
The goal is to create a gigawatt of renewable energy, enough to power a city the size of San Francisco for less than it would cost using coal, in "years, not in decades," Page said. Coal accounts for more than 50 percent of all US power but is one of the big sources of carbon emissions.
A typical data center consumes 300 to 400 megawatts of energy, according to Sandeep Aggarwal, an analyst at Oppenheimer & Co. in San Francisco. Google likely has 10 to 15 data centers, he said.
"If Google is consuming between 3,000 to 5,000 megawatts of energy, they might be one of the largest consumers of energy," said Agarwal. "If they can figure out how to save money in their energy consumption, this sounds like a positive to me."
