GE calls for cheaper, cleaner energy
CEO Jeff Immelt urges utilities to spend more on research and development in order to find new sources of energy.
NEW YORK (CNNMoney.com) -- Jeff Immelt, chairman and CEO of General Electric, said Monday much of the technology to make energy generation cleaner and more efficient is available now. The challenge, however, is deploying it and making it cheaper.
"A lot of the technology is already there," Immelt told a crowd of electric utility executives at an industry meeting sponsored by the Edison Electric Institute, a utility trade group. "This is a business model issue, not a technical issue. Our job is to make them cheaper."
The company is part of a consortium of manufacturers and utilities urging lawmakers to pass nationwide restrictions on greenhouse gasses.
The Bush administration has so far resisted immediate mandatory restrictions, largely on the grounds that waiting for better, cheaper technology would yield better results. All three major presidential candidates support mandatory restrictions.
The climate debate comes as the world is facing a surge in energy demand and a simultaneous desire to cut greenhouse gas emissions. Energy consumption globally is estimated to grow by 50% over the next few decades, while scientists say the world needs to at least halve its greenhouse gas emissions over the same time period if it is to avoid the worst effects of global warming.
In facing this challenge, Immelt urged utility executives to keep all technologies on the table - from solar and wind to nuclear and cleaner coal - and to not let new technologies languish at the expense of maintaining the status-quo.
He said low oil and gas prices historically led to massive underinvestment in the sector, with energy companies spending only about 2% of their revenue on research and development. By way of comparison, healthcare companies have invested about 8% of their sales on R&D, Immelt said. (GE also is a big player in the medical devices industry.)
But with high energy prices now soaring, Immelt believes investments in energy will follow suit.
"There's plenty of incentive now to drive technology into the industry," he said.
Immelt said GE is investing in a wide range of energy technologies. He specifically mentioned solar as one that has great potential.
The cost of solar power should fall from 30 cents a kilowatt hour today to under 15 cents "in a relatively short time," he said. "That should open up a sweet spot for solar."
By comparison, American consumers currently pay about 10 cents an hour on average for electricity, according to the Energy Information Administration.
The U.S. utility industry will likely be a recipient of clean technologies developed outside the U.S., Immelt added, whether it be cleaner coal processes fine-tuned in China or renewable technology pioneered in Europe.
But he encouraged the industry and U.S. government to take the lead in capping greenhouse gas emissions and developing clean sources of energy.