By Harry Forbes, ARC Advisory Group
General Electric explained it’s “ecomagination” initiative in Boston yesterday at one of Boston University’s presidential lectures on Energy and Sustainability. Speaking to an overflow crowd at BU’s Photonics Center, GE Vice President Steve Fludder entitled his remarks “Green is Green: ecomagination at GE”. The latter Green refers to GE’s pursuit of clean energy solutions only when they provide measurable economic benefit to customers.
Fludder explained GE’s strategy for its ecomagination program, and he also discussed the role of the Smart Grid in GE’s vision of the energy future. Regarding the energy future, Fludder noted that, “The answer is going to be a portfolio of technologies. There is no single magical answer. Just as the energy infrastructure of the world today is a portfolio of energy sources and technologies, the energy infrastructure of the future will be, too, but it will be a much different portfolio. This is what we are investing in to bring to life.”
From a technology standpoint, GE has prioritized five areas that it believes are critical: smart grid solutions, distributed renewables, low cost water solutions, energy efficiency, and carbon management. In each of these areas GE is applying its metrics-driven operational culture in order to, as Fludder put it, “Invest, innovate, grow, operate, and lead”.
Part of the strategy is to partner with venture-stage firms that GE has identified as particularly promising. More than a business partnership, GE uses its size and its in-house VC operation to invest in a small set of strategic ventures that have the capability to move its ecomagination portfolio forward.
While it is only one component of GE’s green strategy, the Smart Grid has a special role in the mix. Noting the definitional difficulty of the Smart Grid, Fludder said, “Yes, we see it as bringing 21st century IT to the 20th century transmission and distribution system, but it is so much more than that. The Smart Grid is the system that will allow the deployment of this entire portfolio of transformed energy infrastructure. There is a tendency to think of the Smart Grid as a T&D technology, which it is. But the Smart Grid is also is an enabler of large scale renewable energy deployment, electric vehicles, distributed cogeneration, and substantial engagement of individual people in the energy infrastructure.”
As part of the play, GE is using its clout to promote policy changes as well. GE has identified a set of enabling policies, and is not shy about telling government entities which of their present policies stand most in the way of their stated green goals. One example is the area of carbon sequestration, where Fludder believes a government policy that enables risk-pooling among utility companies will enable inventor-owned utilities to take on large investments in new clean coal generating processes.
GE sees the transformation of the present energy portfolio as a challenge that crosses all segments of society. Such a massive and difficult transformation is very difficult to execute without an immediate and visible crisis. Yet, he told students, now is the most exciting time in decades to be working in the energy industries.