Carbon: an early focus on solutions pays off
- by: SPECIAL REPORT: Deb Richards
- From: The Australian
- April 20, 2012
While its roots lie in Thomas Edison's invention of the lightbulb at the end of the 19th century, GE has embraced the megatrends of the new millennium, which Immelt identified as affordable healthcare and clean energy.
These have become the cornerstones of GE's company strategy, though not without creating some stakeholder discontent. In a company used to being tied to short timeframes and quarterly reporting, Immelt adopted an unusually "long view", despite a "no" vote from the company's top 40 executives.
A commitment to renewable energy generation and energy efficiency was launched under the "Ecomagination" banner with ambitious targets.
GE cut its greenhouse emissions by 22 per cent by 2010, by which time $US5 billion had been invested in clean technology R&D.
It was a successful move.
GE has saved $US130 million in energy costs since 2005, and more than 140 new low-carbon products have been developed, generating more than $US85 billion in sales and services to 2010.
After conducting its 2010 review the company recommitted to increasing its energy division revenue at twice the rate of other parts of the company. The director of Ecomagination in Australia, Ben Waters, says: "It's always easier to resist change than it is to embrace it. But companies have to transition. It's coming, and it's in one's interests to act early."
Research commissioned by GE last year highlighted the key issues for Australian business and its adaption to the challenges of climate change. More than half the 130 senior executives interviewed by the Economist Intelligence Unit felt their company was ready for a low-carbon future, and 70 per cent had started implementing a strategy for reducing carbon emissions.
However, separate research by Vivid Economics found Australia is lagging many trading partners in using the changes to generate income. "Economies that can grow while reducing their carbon emissions will be best positioned for higher prosperity in a carbon-constrained future," Vivid Economics director Cameron Hepburn says.
GE's early shift to a solutions-based approach means it's now in the box seat. With the arrival of carbon pricing in Australia, GE is working with major polluters on reducing liabilities, and with governments and smaller businesses on a range of initiatives, from LED lighting and electric vehicles to wind and solar power generation. It has a $20 million research agreement with CSIRO on research projects, including smart grids and "virtual" power stations.
Flexibility and adaptive responses are key. "We think about the needs of customers, not what products we have and how to sell them," Waters says. "We make revenue, take out the cost and solve customer problems."
At Springfield, a new 100,000-home city being built on the southwestern edge of Brisbane, GE technology is helping to make the development independent in meeting its energy and water needs.
It's also working with the City of Yarra in Melbourne to make 35,000 homes and 10,500 businesses carbon-neutral by 2020.
GE recently won a $130 million contract with Leighton Contractors to establish a wind farm at Geraldton in Western Australia. Nearby, GE has invested in Australia's first utility-scale solar power scheme, a 10-megawatt project on 80 hectares that provides power to WA's Southern Seawater Desalination Plant.
GE has partnered with Virgin Australia in a consortium developing biofuel from mallee eucalypt plantations. CSIRO research shows biofuels could reduce aviation emissions by 17 per cent, generate 12,000 jobs and cut avgas imports by $2 billion over 20 years.
Six and a half thousand GE LED streetlights are about to be installed in the City of Sydney, with estimated energy savings of between 70 per cent and 80 per cent, as well as lower maintenance costs as the lights last for 20 years.
Waters is excited about a carbon-constrained future. "This is about real jobs, real business and real money, coming from a change that's important to the world as a whole."