Tuesday, July 20, 2010

Google Data Centers Co-Locate Near Wind Farms: The New Peanut Butter and Jelly Combo

Forget boring economists talking about left shoes and right shoes or peanut butter and jelly, the new examples of complements in future Mankiw digital texts will focus on Google data centers co-locating next to windfarms.

As you know, Erin Mansur and I are almost done with a new paper that examines the geography of where different types of manufacturing industries locate as a function of local electricity prices. Recognizing that the manufacturing sector is a declining share of our economy, I had hopes of exploring where electricity intensive data centers were opening in the United States. Simple economics would predict that they should be attracted to areas featuring cheap electricity prices and close to population centers.

But, My friends at Google have not provided me with data on where they locate their data centers. The new news about the NextEra/Google partnership highlights that Google is thinking through how to be a "green business". The carbon emissions factor associated with its data centers will plummet if wind power produces the electricity. My question for the Google guys is why did they take this action now? Do they predict that the Senate will pass a carbon cap & trade on the electric utilities and this will raise electricity prices? Or, is Google simply "doing no evil"?

So, if I'm the Mayor of a rural area -- can economic development goals be furthered by attracting a Google data center and wind farms? How many jobs and opportunities are created once the construction is done?