Google’s energy subsidiary has signed a 20-year power purchase agreement with NextEra Energy.

Google will begin buying 114 megawatts of electricity from an Iowa wind farm later this year. Google intends to sell this energy on wholesale markets, and simultaneously buy energy where they need it.

By buying the wind energy directly, Google has created a giant hedge against both rising energy prices and the future cost of compliance with emissions reduction mandates

The company also pointed out that "our deal has a greater impact on the renewable industry than simply buying RECs from third parties; our long-term commitment directly frees up capital for the developer to build more wind projects … Through the long term purchase of renewable energy at a predetermined price, we’re partially protecting ourselves against future increases in power prices. This is a case where buying green makes business sense.".