General Electric’s Ecomagination Finds Profit in Going Green
Initiative partners GE with companies seeking earth-friendly growth
Washington -- Growing concern over global climate change is translating into lucrative business opportunities for industry conglomerate General Electric (GE). Only two years into its “ecomagination” initiative, the corporation already is benefiting from the planet’s ever increasing demand for alternative energy technologies.
Launched in May 2005, ecomagination commits the fifth-largest U.S. company to increasing from $900 million in 2006 to $1.5 billion by 2010 its investment in research in areas such as environmentally cleaner energy, hybrid engines and water treatment systems.
Announcing the initiative, GE’s chief executive officer, Jeffrey Immelt, said ecomagination intends to “develop tomorrow’s solutions such as solar energy, hybrid locomotives, fuel cells, lower-emission aircraft engines, lighter and stronger durable materials, efficient lighting, and water purification technology.”
As a result of developing these new products and technologies and providing them to customers, the program already has produced $12 billion in revenue, with an additional $50 billion expected from pending orders and commitments, according to GE’s 2006 ecomagination report.
Immelt and ecomagination Vice President Lorraine Bolsinger told shareholders that GE “has never had an initiative that has generated better financial returns so quickly.” The company is anticipating an annual increase in revenue from ecomagination products to at least $20 billion in 2010 and tells its shareholders that “green is green,” in reference to cash profits. This would represent a doubling of such revenues from 2005 levels.
GE is partnering with corporations and governments around the world through ecomagination. In February, GE Aviation signed a memorandum of understanding with India’s largest airline, Air India, to collaborate on a series of initiatives and tasks to make Air India’s operations more sustainable. For example, GE is providing the airline’s fleet of Boeing 777-300ERs with fuel-efficient GE90-115B engines. By using the engines, the airline expects to save $150 million over the next 15 years while positioning itself as a relatively environmentally friendly service.
The development of cheaper and more efficient alternative energy also can play a role in increasing the quantity of clean drinking water because the main operating expense of facilities that remove salt and other minerals from water comes from energy costs.
Much of the world is anticipating severe potable water shortages in the coming decades, especially in Southeast Asia, Africa and Latin America. To address the demand, GE is providing solar energy modules and water filtration technologies to rural areas in India, Bangladesh, Nepal and Malaysia. In Africa, GE is partnering with the Algerian government, the Overseas Private Investment Corporation and the Algerian Energy Company to build the continent’s largest desalinization plant at Hamma.
The Hamma facility, which is expected to produce 200,000 cubic meters of potable water per day by using reverse osmosis technology, would supply more than 20 percent of the drinking water to the residents of Algeria’s capital and largest city, Algiers.
Along with profiting from its investments in developing new technologies, ecomagination also required that GE reduce its overall greenhouse gas emissions 1 percent by 2012 (they would have increased otherwise) through decreasing its greenhouse gas intensity 30 percent by 2008 and improving its energy efficiency 30 percent by the end of 2012. Greenhouse gas intensity is the ratio of greenhouse gas emissions to economic output.
“By making a public commitment and then tracking the results, GE is leading by example and demonstrating how one company can make a difference,” the company said in its 2006 annual report.
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