General Electric Goes for the Gold by Going Green
In 2005, General Electric (NYSE:GE) CEO Jeff Immelt announced the creation of “ecomagination, a GE initiative to aggressively bring to market new technologies that will help customers meet pressing environmental challenges.” Through the initiative, GE has doubled research and development spending on cleaner technologies to $1.5 billion annually, developed a thick portfolio of cleaner energy products, and achieved a goal of doubling revenues from cleaner energy products to more than $20 billion a year.
A cocktail of regulatory and consumer pressure and the development of new drilling technology (some of which General Electric helped pioneer) has fueled a fairly rapid evolution in the energy market, and Ecomagination reflects GE’s adaptations to the changes. The program has made GE not just a competitor but a leader in the cleaner-energy revolution, an enormously powerful and profitable position that allows the company to service both the oil and gas industry and the renewable energy industry. This position gives GE an enormously broad revenue base that captures both ends of an extremely large and diverse market.
For example, on one end of the market, GE is establishing deep alliances with major oil and gas companies like Chevron (NYSE:CVX). The two companies announced on February 3 the creation of the Chevron GE Technology Alliance, a partnership designed to develop an commercialize technology for the oil and gas industry. On the other end of the market, GE is building the WattStation EV Charger, a 4-kilowatt wind turbine that powers an EV charging station with a relatively small wind turbine. Wherever people are conducting the business of energy production and consumption, GE is there to sell a product or solve a problem, profiting all the way.