GE ENERGY ANNOUNCES ITS FIRST $4 BIL FROM WIND

GE Energy has been under some pressure this year. Like so many other businesses, its stock price ain’t what it used to be.

A recent story about GE’s purchase of thin film solar energy specialist PrimeStar (see GE BUYS SOLAR COMPANY) brought this remark from a disapproving reader: “GE is operating a lot like Microsoft - they sit back with cash in pocket, watch what the "cool kids" are doing then go out and buy some startup that is a poor approximation of the original…PrimeStar Solar is far behind other companies such as their Colorado competitor AVA Solar…”

A company the size of GE Energy is an easy target, it takes care of itself and doesn’t need NewEnergyNews rushing to its defense. It is instructive in this context, however, to consider again the observation from economist and social critic Hazel Henderson (see preceding post): “…the public interest also demands that oil companies use their piles of cash to invest directly in the most cost-effective new energy sources now growing at double digit rates around the world…wind power, solar photovoltaics sprouting on rooftops in many countries, solar thermal concentrator power plants now dotting the desert Southwest in the USA, Spain and other countries. Together with unexploited geothermal and ocean energy, these Solar Age energy sources are already delivering electricity to homes and businesses worldwide…pension funds should also be investing in all these new energy sources to assure the future financial security of their beneficiaries…Socially concerned investors, employees and citizens should hold the managers of their pension funds to higher standards to foster the transition to the Solar Age.”

Big bad corporate entity though it is (with money in all kinds of energy from nuclear to oil and gas), GE Energy has now done $4 BILLION of the kind of socially responsible investing Henderson advocates. It will be interesting to see how AVA Solar handles itself when it has made its first $4 billion in New Energy.

The GE 1.5 MW turbine has become the industry standard. (click to enlarge)

GE reaches $4 billion mark for wind energy investments
July 9, 2008 (Bloomberg News via International Herald Tribune)

WHO
GE Energy Financial Services, subsidiary of General Electric (Alex Urquhart, President/CEO);

WHAT
GE Energy’s latest $100 million investment in wind energy takes its total investments in New Energy to over $4 billion. Experts attribute GE Energy’s drive to build New Energy to 2 government policy factors: (1) federal and local incentives like production tax credits and investment tax credits and (2) state Renewable Electricity Standards (RESs) that require a state’s utilities to obtain a minimum of electricity from New Energy by a date certain, guaranteeing producers base line market demand.

Number 2 in the world - and growing. (click to enlarge)

WHEN
- GE Energy’s growth has been rapid. It reached the $3 billion investment level in February.
- The company announced in January 2008 its goal is have $6 billion in New Energy holdings by 2010.
- GE Energy’s purchase of wind farms in New York capitalizes on the state’s RES requiring utilities to obtain 25% of their electricity from New Energy sources by 2013.

WHERE
- GE Energy’s latest $100 million lay is in 3 wind farms in northern and western New York state.
- GE Energy is based in Fairfield, Conn.

WHY
- GE Energy is the biggest wind turbine manufacturer/supplier in the U.S. and the 2nd biggest in the world.
- The company owns or has investments in 76 wind farms worldwide representing 4.000 megawatts of capacity.
- The 3 wind farms newly acquired: a 126-megawatt wind farm in Wethersfield, a 106.5-megawatt farm in Chateaugay and a 97.5-megawatt site in Altona.
- The new wind farms will have the GE 1.5 megawatt turbine, a turbine that GE has made the industry standard in the U.S. and around the world.

In an industry with projected growth like this, GE's prospects appear good. (click to enlarge)

QUOTES
Alex Urquhart, President/CEO, GE Energy Financial Services: "We have reached the $4 billion milestone just five months after hitting $3 billion, confirming that renewable energy is our fastest-growing business…"