Jeff Immelt, chairman and CEO of global industrial giant and leading energy supply company GE, had just a few words to say during a lightning visit to Australia this week to meet clients, sign deals and announce winners of the company’s first “ecomagination” low carbon challenge in Australasia, but his words were worth noting, particularly in the feverish and polarised political debate that pervades both here and in the US.
“We’ve never viewed clean energy as ideological,” he told guests at the winner’s presentation in Sydney on Tuesday night. “We’ve always viewed it as problem solving. That means it can take place in a mine, in ports, or in natural gas, or wherever a problem needs to be solved.”
Immelt explained that the genesis of the “ecomagination” concept – which sounds like a marketing tool but he insists it is not – came from a 2004 exercise which pitted a “red team” of internal researchers that were asked to prove the science of global warming, against a “blue team” that were tasked with refuting it. In the end, 18 out of 20-strong blue team defected to the red team.
“We always approached this from a standpoint of science and technology,” Immelt said. “It’s not a specific green initiative. I mean, I’ve never camped.”
But it has informed and guided the growth and direction of the business. Since 2005, the ecomagination division has spawned more than 200 new products which each have to meet a test of reducing emissions by at least 15 per cent from the ones they replace. This can include renewable energy, super efficient gas turbines, water efficiency, or smart appliances. Annual revenues from the business have grown from $5 billion to $25 billion in that period, and it still spends 40 per cent of its $6 billion annual R&D budget on the sector.
“We are one of the biggest cleantech investors in the world,” Immelt said. He added that in 2005, GE saw a chance to invest in innovation that could drive clean energy futures, and an opportunity to play a role in public policy – something that is has prosecuted in Australia with its support for the carbon price.
Immelt said later in a conversation with RenewEconomy – and we make mention of this one remark because it is a matter of public record – that the wind energy division that GE bought nearly a decade ago had reduced the cost of technology by nearly two thirds – from 25c/kWh to 8c/kWh.
At that price, for instance, wind energy is cheaper than new coal plants. The point he wanted to make in this and his public comments was that it was the economics of these technologies that will win out. It’s a point underlined by a series of technology cost estimates, including those by Bloomberg New Energy Finance, and even the more conservative estimates of the Bureau of Resource and Energy Economics. But it’s not something that is widely understood, either in the broad public arena, or even in the hotbed of public policy debates. But it should be.