Jon Powers: Welcome to Experts Only Podcast sponsored by Clean Capital. Learn more at cleancapital.com. I’m your host Jon Powers. Each week we explore the intersection of energy, innovation and finance with leaders across the industry. Thank you so much for joining us.

Thanks so much for joining us here at Experts Only Podcast. I’m the host Jon Powers. Today we’re speaking with Michael Terrell who leads Energy Market Strategy at Google. Michael’s helped to develop and lead the business team there that’s responsible for everything from the company’s data center to their global energy portfolio and in that role, Michael has advanced new approaches to Google’s procurement of over three gigawatts of renewable energy power. They’re pioneers from the first of their kind, renewable energy purchases, both in the U.S. and overseas. And they are really, Michael talked about this in the podcast, but really developing markets that maybe previously didn’t exist helping to meet both Google’s needs and those in the market. So hope you enjoy.

Michael, thanks so much for joining us Experts Only Podcast.

Michael Terrell: Thanks, glad to be here.

Jon Powers: So, I think your bio sums it up really well, you know before you ended up at Google, you were bouncing around at bay. You actually have a very similar background that I do. You cover a lot in your career. Go to law school, working at the White House council on environmental quality, policy at state department, legal work at places like Baker McKenzie, then obviously you ended up working yourself up at Google’s head of energy market development. But before that, stepping back, what first triggered your interest in the energy and climate space?

Michael Terrell: Well, thanks Jon. Actually my family was in the energy business, although what you would have thought. My grandfather owned a coal mining company in the southeast US, which had a number of mines and I used to actually as a kid go to the mines with my grandfather and looked at rocks, and really got into energy from that angle, and especially geology. I went to college and studied forestry and geology, but my interest in energy goes way way back to beginning, and I’d like to say that my family was in the coal business, we were in the energy business …

Jon Powers: Right.

Michael Terrell: … and this has been changing. But that’s really how I initially was exposed to it growing up.

Jon Powers: That’s interesting. How did you go from being in hands-on on the coal mine to sort of the policy side of it?

Michael Terrell: So, when I was in college, I spent my summers out working for the forest service and park service in Oregon and Washington State. I was fascinated by the way that the policies were set at those national forest and national parks. It was very obvious from being out there that decisions were being made in Washington have far reaching effect across the country.

Jon Powers: Right.

Michael Terrell: Second to my interest in forest and geology, I always had an interest in policy and political science. I went to D.C. after school, and got an internship at the White House. I was really exposed to this intersection of policy and science, and environmental science and energy. I really worked my way up from there, but it was really great exposure to sort of being out in the field, and seeing how policy decision actually affect the real world, and then getting the chance to go to D.C., and be part of making those policy decisions.

Jon Powers: How does your family, that was in the energy business early on in your life, sort of view what you are doing today?

Michael Terrell: There is a lot of support. There wasn’t initially, and I actually still have members of my family, who are in the coal business, but they understand the case for what I am doing, and what I love about being involved in the energy space, especially green energy is that there is a really strong business case, and there is strong case for advancing technology and economic growth that comes along with it. I think that’s something that resonates with everybody.

Jon Powers: Yeah absolutely, I mean one of the things we focus heavily on not just Clean Capital Podcasts, is the business case and the investment case, and of course the jobs, right? The job opportunity.

Michael Terrell: Yeah absolutely.

Jon Powers: How did you go from the policy side, you were at Van Ness, right working in energy and climate, and then into Google?

Michael Terrell: Again, because I came from a family, very business focus family; my grandfather was a CEO, and I was really always interested in the scale that you can drive from the business perspective and the rigor and the discipline it imposes on you in terms of having to make a business successful. When I was in Washington working on policy, I got really interested in how the energy sector was evolving, how policy intersected with that. Because of that I was exposed to some of the newer things happening in the industry, the evolution of the industry. The early of solar and wind and clean energy, and its intersection with climate. I really saw how businesses could have a huge role to play in driving the future. I really wanted to be a part of that. That’s what ultimately led me to Google, which was really being forward looking, looking at the evolution of technology, and looking at how a business can affect the evolution of the energy space.

Jon Powers: There obviously has been a evolution in the energy and climate space. More and more corporates are standing up, and committing to renewable energy, and carbon goals. But reality at Google, this is not something new, right, it’s not only a current initiative, but sort of the heart of the culture at Google. Can you talk a little bit about that history, and what’s driving that?

Michael Terrell: It really stems from our founders, Larry and Sergey, they had a personal interest in the energy space early on. In the early days in the company brought that to the table, and as we started to have more of a exposure in the energy space, more of a footprint so to speak in terms of building data centers, and powering computers servers with energy, there was a really nice intersection with the interest in energy and Google being part of the solution, and the growth of the business. Very from the early days, there was a lot of interest in really trying to take this sector forward. We did early projects, we didn’t always succeed, but we did early projects around electric vehicles for example. I remember we had engineers, who rigged Toyota Priuses back then to be plug-in vehicles. At the time there were no plug-in vehicles other than the very very early Teslas.

We had other projects around deploying renewables at scale on our rooftops, and other projects around energy efficiency, and access to information. It’s really been embedded in the DNA here from the early days. Google had its heart in its engineering company, and we have a lot of engineers here, who were really interested in solving problems, and solving technology problems. There is no bigger challenge than really how to transform the energy space.

Jon Powers: It’s always interesting to me when I hear of the different players, who’ve come and met a part of the efforts there. From Roumar Jamdar, who led ARPA-E, Kate Brandt who led sustainability there, you know when I was working in the White House, there was always interesting efforts going around, not just energy and climate, but building energy efficiency, and using data to sort of better understand what is happening across that spectrum. Such an interesting breadth, but, one of the things that as you are looking sort of now to grow operations, as your operations have grown or continue to grow. The way big corporates are buying electricity has changed dramatically in the last 10 years. It went from where people just pay the utility bill, probably negotiate for a better rate, to having sophisticated energy procurement shops. You guys obviously are leading the way a little bit there. Can you talk about what is like within Google on those efforts, or to those teams look like, sort of looking at opportunities?

Michael Terrell: I think we’ve been lucky in that we are still a very young company, and we’ve really been inventing as we go along, as we’ve been growing the business. It’s really only been the last ten years or so, where Google’s had the electricity load, the global electricity consumption that really justify making big bets around renewable energy.

But, we are sort of able to build the team from the ground up, because we were building the company from the ground up. We were inventing how to do data centers, computing, and networking as we went along. Energy was just a part of that. We actually designed and built our own servers, we had a lot of work we’ve done around how to make data centers efficient, and how we deal with the power supply for those data centers, is really no different. And it was always asking the question, what’s the best thing we can do, and do we need to do it ourselves if the market doesn’t provide for that.

That’s really how we got our start, was that the market didn’t provide what we are looking for. We were expanding, and building data centers, and looking for ways to find a renewable energy power supplier for them, and the market wasn’t offering it. Utility providers weren’t offering it, they were really conceived of the idea of offering renewables to customers on a tailored basis. So, we went out and did our first deals of our own, working, going directly to wind developers, and offering to offtake all of the energy from their wind farms that they were to build them in the vicinity of our data centers. We really got started by finding a way to do this on our own, and really sort of solving the market problem for ourselves. As we’ve gotten more experience, we’ve seen others get into the space. It’s really sort of gaining momentum, and you are seeing a lot more companies, who are taking an interest in renewables. It is super exciting. Not everybody has the capacity that we have, but there is a lot of opportunity there.

We’ve really built sort of pretty amazing energy team here that consists of people who have come from all walks of the industry, whether it’s utilities, or solar and wind developers, or investment firms, or others. So, we do have really strong energy team here now at Google that’s thinking about this everyday, and how to solve these problems not only for us, but for the sector at large.

Jon Powers: For the sector at large. Let’s talk domestic US here first. You procuring energy obviously could be incredibly challenging, you sort of working across 50 different energy pietums, and when you think about state policy and regulation. You guys had some great success, since 2010 Google signed more than 30 solar wind projects across the US and Europe making you the largest corporate procurers of renewable energy. Talk a little bit about your role as the head of energy market development, how you get involved in that. And then I wanna hear a little bit about how the team that’s making these decisions looking procurement opportunities, prioritizing them and figuring out obviously a tremendous amount of opportunity. How do you determine where to head next.

Michael Terrell: As the head of market development, what that means for the lay person is that I change the markets to make meet the needs of our business. What we found is that almost no electricity market in the world actually meets all the needs of our business, or a lot of other businesses. They really are in many ways still locked in the past, and we really need to bring them, and modernize energy markets, make them really serve the customer of the future, not just Google, but others. What we had to do is to go and change the market rules, and change the way markets work to meet the needs of our business.

The first way we did this was we went to the Federal Energy Regulatory Commission, and got wholesale market authority to go buy solar power on the wholesale market. So, we could go directly to wind developers, and get wind farms built to serve our business. We then went to utilities, and really encouraged them and urged them, and work with them in partnership to create new purchase programs for large corporates, or those who wanted to buy renewable energy on a very large scale, and couldn’t do it behind the meter. We call those green tariff programs, and we did our first one in Carolina, and 2013, and you now see dozens of states adopt these kinds of programs. In fact what to me pretty amazing is that you really don’t see any utility these days, who doesn’t have some sort of renewable energy offering for customers like us. I think that’s a lot of progress. But we still have a long way to go, and we can talk about that. Every market is different, and we’ve had to look for solutions that fit whichever particular market that we are in, or we go to markets because they offer a particular solution.

Your question on how does the team prioritize; we look firstly where we have operations. Google put data centers in places years ago we weren’t really thinking about getting to the scale that we’ve been now. We weren’t really thinking about how we would add supply clean power on a large scale. So, we looked at the markets where we’ve had existing data centers, and looked for ways to solve for those markets. For example, North Carolina is a great example that where we worked with utility provider there to create a green purchase program. We’ve done the same in Georgia, we’ve done the same in other markets as well. Secondly, we are looking where do we wanna expand, and where the new places that we wanna go. We are lucky enough that, we are still very early in the growth of cloud computing, and so we’re still expanding quite a bit as a business, and that opens up lots of possibilities to go to new places.

Jon Powers: You guys aren’t acting as the developers, right? So, you are entering into … or are you?

Michael Terrell: No, that’s something we leave to the market.

Jon Powers: Yes.

Michael Terrell: We’ll do one of a couple things …

Jon Powers: Smart move.

Michael Terrell: … We’ll issue RFPs out to renewable energy developers, and they’ll come back to us with a … We’ll issue a set of criteria, and they’ll come back to us with project ideas that meet those criteria. Or we’ll work with utilities, and then how the utilities go out and reach out to the developer community to go and find projects. So, it’s a little bit of a mix of both.

Jon Powers: In scale of projects, give sense of what you are seeing and RFPs, tens of megawatts or single digit opportunities, or these are all triple digit megawatt opportunities?

Michael Terrell: Our data centers that we own and operate are akin to the dozens of megawatts or even greater. We really are looking to procure renewables on a very large scale. If you take into account the capacity factors of wind and solar, that can translate into projects that are 200 megawatts, or 250 megawatts. We are certainly looking at that kind of scale with the projects that we are trying to sign up.

Jon Powers: You guys have goal of 3 gigawatts right of renewables?

Michael Terrell: We’ve now signed contracts for over 3 gigawatts of renewables.

Jon Powers: Wow.

Michael Terrell: We’ve set a goal as a company to match 100% of our energy consumption with purchases of renewable energy. In 2017, which is our most recent number, we use 7.6 terawatt hours of electricity. That’s a lot of renewables that we need to purchase. We’ve done deals for over 3 gigawatts, and as I’d like to say we’re just getting started.

Jon Powers: In what you are seeing developed, especially over talking about policy and market development, are you seeing storage by more and more over role as that space is beginning to mature?

Michael Terrell: Yeah, I think it is fascinating. It reminds me of where we were with solar a few years ago, where the costs are really starting to come down, and get competitive, and they’re only headed on a downward trajectory,  which is a good thing in this case. We are seeing lots more deals or offers with storage paired with solar or even wind. There is a lot of opportunity for that in market. It tends to pencil out better in some of the higher cost markets which is …

Jon Powers: Sure

Michael Terrell: … not always where we have data centers. I think it’s exciting, I think the next few years, that space are gonna be incredibly exciting.

Jon Powers: How much of your efforts revolve around the data centers versus sort of the rest of the operation?

Michael Terrell: We cover, our group covers, renewable purchases for the whole company …

Jon Powers: Yeah, exactly.

Michael Terrell: … So, we help with our buildings team, we’re doing deals for that. We also work with other partners, other Alphabet companies. It’s really great, it gives us an opportunity to work with …

Jon Powers: You guys are working across the whole Alphabet portfolio, not just …

Michael Terrell: Yeah, and our renewable purchases are 100% renewable energy goal is actually an Alphabet wide goal.

Jon Powers: Excellent, excellent. When I come back to you’re talking earlier about the corporate procurement space in general. Bloomberg Energy Finance put out some great numbers. Earlier this year the 13.4 gigawatts of corporate in energy contracts signed in 2018, this is an increase of 200% than the year before. More and more players are getting involved. So as you think about those market conversations you’re having maybe at the PUCs or at the state level, how is the dialogue changing now, when you are sitting on the other end of the table of the utilities. Are they, obviously it’s state by state thing, but are they more welcoming to your message, you are able to sort of flex your job and business strength in those dialogues differently than you could before?

Michael Terrell: One thing about corporate renewables, you are seeing corporate renewable demand drive more renewables onto the grid than RPSs did historically …

Jon Powers: Yeah.

Michael Terrell: … which is pretty incredible. This is a huge demand I would say. If you look at some of the groups that are out there, the Renewable Energy Buyers Alliance has a group of companies, of which were members that set up a goal to purchase 60 gigawatts by 2025. RE100, which is an effort based out of London, has a group of member companies, and collectively they’ve agreed, they’ve pledged to buy over 87 gigawatts of renewables by 2030. So, there is a huge demand out there, and it’s really being driven by the purchasers, by the ones, who were actually buying the power. I really think that’s what’s gonna shape the markets in the future. It’s one of the things that’s really exciting about how the energy space has evolved is that there’s all of these new players now. I think that really adds and creates the opportunity for more innovation. Because the more players, the more of an active marketplace you have, the faster that marketplace is gonna innovate. That’s a good thing when it comes to trying to drive carbon free energy, and so for climate change.

This new group of players, these corporate players, these corporate renewable energy purchasers are doing just that, and they’re really driving up the direction of the markets, and you’re seeing utilities respond, you’re seeing policy makers respond. For example we just saw on the last few weeks, we announced our first renewable energy deal in Taiwan, we saw the Government of Taiwan change their law to allow companies, who wanna buy renewable energy, to do that. We’ve seen that happen in multiple states, we’ve seen the European Union gets more active and helping to facilitate these deals.

It’s an incredibly exciting time to be in the space. That said, we still have a long way to go. There is only probably about, if you look at the Bloomberg numbers, I would say, 50 to 100 companies, who are doing these deals on a sort of big scale, on a large scale, big basis. How do we take 100 companies to 100 thousand companies. Because, that’s what it’s really gonna take. And, that’s really where the markets are heading.

Jon Powers: I want to come back to that in one second, but when you are looking at the deals like the one at Taiwan or even domestically, since you are working through developers, they are handling the finance and the other side, right? Are you guys doing any of that off your books?

Michael Terrell: We tend to not get involved with the financing at this point. We have …

Jon Powers: Right.

Michael Terrell: … in the past gotten involved on the investment side, and we’ve done some deals through that. But, more recently it’s been just mostly as a purchaser, signing a PPA.

Jon Powers: Excellent. So, going back to your point about getting more involved; obviously a lot of companies out there don’t have the resources Google does to build out the sophisticated themes you guys have that are really changing and opening markets. So, here is a smaller corporate looking to grow in this space, because it is state by state effort for instance, what advice do you have for them to get engaged maybe on policy, is it organizations like RIBA, where should the start to get involved to work their way into the path you guys have created.

Michael Terrell: I think it is absolutely getting involved and finding partners. Whether it is a local partner, if you look at many states, many locations, there is usually a local business council or local clean energy group that’s a good place to work with partners. Or there is national organizations, we mentioned Renewable Energy Buyers Alliance, there is also the Advanced Energy Economy, a couple more. It is a great place for companies who don’t have all the resources, and large energy teams companies like Google have to go, and get help and expertise in training, and find the ways to do deals, or partner with others to do deals. I think we are actually members of these organizations, really try to share some of our knowledge, we recognize that we have a unique place in the market, and we have a unique team here. We wanna share as much of that knowledge as possible, and also we recognize that we are on the frontier of where all of these deals are happening, and we wanna be able to share that experience and knowledge with other companies, too.

There is really terrific organizations out there, I think REBA is one, is almost a one-stop-shop now for companies, who are looking to get into the renewable space. There is a lot of resources out there for people, who don’t have large energy teams.

Jon Powers: We’ve been talking to Miranda Ballentine there, CleanCapital will be hopefully joining soon, we are big fans of the work that she’s been doing. Hoping to have her on the podcast soon talk about it. So, going to back to it, you mentioned about advice, you know wanted to sort of end with a pretty standard question I asked to everyone, who joins and you had such a fascinating career. You’re doing transformational work today, driving one of the most transnational companies on their efforts around clean energy, but if you sort of step back to visit yourself when you were graduating forestry school for instance, sit down and have a beer, what piece of advice would you give yourself.

Michael Terrell: That’s a great question. I think actually to have a blend of impatient impatience. So, on the one hand impatience, which is one of the things that led me out to silicon valley, which is that I was getting frustrated with the pace of change that was happening in Washington, and I wanted to move at a faster pace. I was, I really felt the urgent need to be solving climate change. That led me to silicon valley, where things moving incredibly fast here. I really wanted to be part of that, I really wanted to drive change at a faster pace.

On the other hand, it is useful to have patience. Sometimes, you have to let the markets play out, or let the costs come down, or let the technology mature. And sometimes that can seem like an eternity, but then when it gets to a sort of tipping point, things happen very quickly. So, you’ve seen that with solar. If you’re impatient about solar in 2005 and 2006 or 2007, you could get very frustrated, and wanna leave the space altogether. If you’ve done that, you would have missed this incredible wave and rush we’ve seen that’s come since then. You could say the same thing with batteries today, and I think you could say the same thing with empowering anyone who wants to have access to clean energy, anyone who wants to be 100% renewable. The pace of change sort of seems to be slow, but if you’re just patient, and continue pushing on the levers that we think are gonna really open things up, things will hopefully blow up, and move really fast.

Jon Powers: Thank you. Thank you for your leadership, and helping to open up some of these opportunities. I think you’re right, I think the markets have been transforming in a way, I imagine no one would even have considered 20 years ago. In the last 10 years the ramp-up is happening and continue to grow, and it’s because of leaders like Google and yourself that are helping to do that. So, Michael, thank you so much for joining us.

Michael Terrell: Terrific, thanks Jon for having me.

Jon Powers: Thanks so much to Michael Terrell for joining us at Experts Only Podcast. What an interesting conversation, and great advice. For those looking to learn more, you can always check out some of the Google’s tools. They’ve got a sustaniability.google website. You can learn about some of the amazing things that are happening in this space. Also, Michael suggested Renewable Energy Buyers Alliance, and other platforms like that are great to learn about policy, and where to get involved in opportunities for procurement.

I’d like to thank our producers, Lauren Glickman and our intern Darnell Luben for their work on this podcast, and thank you so much for listening. If you have an advice, please go to cleancapital.com, and let us know your thoughts on folks we should be interviewing for more episodes, you can get them there. And as always, we look forward to continuing the conversation.

Thanks for listening today’s conversation. Find more episodes on cleancapital.com, ITunes or wherever you get your podcasts. If you liked what you hear, be sure to subscribe and leave us a five star review. We’re looking forward to continuing our conversation on energy, innovation, and finance with you.