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What’s behind Alphabet’s Malta Spin-Off?

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Renewable energy storage solution

Alphabet’s (GOOGL) X subsidiary spun off its energy storage project called Malta into an independent company, Bloomberg reported. Unlike Waymo or Loon, Malta is accepting funding from outside investors and will operate as a non-Alphabet company. Malta focuses on developing cheap energy storage solutions, particularly solutions for storing energy from renewable sources such as solar and wind for later use.

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Driving uptake of renewable energy

A lack of affordable, reliable energy storage is currently limiting the uptake of renewable energy, according to Raj Apte, an expert that advises Alphabet’s X subsidiary. Alphabet is one of the large corporations with big ambitions to run its operations on 100% renewable energy as part of reducing its carbon footprint and curbing global warming.

The other companies with this goal include Facebook (FB), T-Mobile (TMUS), Amazon (AMZN), and Microsoft (MSFT). Facebook is underway with the development of its first Asian data center in Singapore that will be powered with solar energy, CNBC reported. T-Mobile is working on its goal of powering its headquarters building with 100% renewable energy by 2021. Amazon and Microsoft also want to run their operations on 100% renewable energy. The founders of Amazon and Microsoft recently led a $26 million funding round for Malta through a vehicle known as Breakthrough Energy Ventures.

Opportunity to cut costs

Malta’s breakthrough could help renewable energy-focused companies such as Alphabet and Microsoft save costs on their electricity expenses. Alphabet incurred $25.4 billion in operating expenses in the third quarter of 2018, representing an increase of 27% year-over-year.

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