Google (NASDAQ: GOOG) has spent billions over the past few years investing in renewable energy projects and trying in general to cut its impact on the environment. Google is a successful business, and these investments have not been just for the benefit of the environment, or to increase their sense of wellbeing; they are investments made with a goal to making a profit in the future.

Rick Needham, the director of energy and sustainability at Google recently gave a presentation at the Cleantech Forum in San Francisco, in which he explained that, “while fossil-based prices are on a cost curve that goes up, renewable prices are on this march downward.”

Google hope that investments made now will put them in a strong position in the future when renewable energy becomes much cheaper than fossil fuels.

Related article: Clarifying the Clean Energy Innovation v Deployment Debate

One reason for the opposing trends that renewable energy and fossil fuels are experiencing can be found within the basic fundamentals of the energy sources:

• The renewable energy industry relies on mass manufacturing and ever more efficient technologies to harvest energy from limitless natural resources; this leads to constantly cheaper prices of electricity.

• The fossil fuel industry on the other hand relies on increasingly more complex and expensive technologies to extract dwindling reserves from ever more challenging locations. As time goes on the cost of producing the electricity just continues to increase; even anomalies such as the US shale boom which sent gas prices to record lows, are not enough to reverse the overall long term trend.

Google has already invested around $1 billion in alternative power projects with a combined capacity of more than 2GW, and has also supported studies into energy efficiency, which enables their data centres to run on half the power of conventional ones, saving over $1 billion in energy costs.

By. Joao Peixe of Oilprice.com