GE Is Flexing Its “Ecomagination” Muscles To The Tune Of $10 Billion

Todays top stocks to buyClean energy supporters rejoice as one of the biggest conglomerates in the world just stepped up to the sustainability plate in 2 major ways…

They’ve been pioneers for years, but General Electric Company (NYSE:GE) has decided to kick up their clean energy crusade yet another notch.

Last week, the Company announced that it was investing a further $10 billion into its ecomagination research and development initiative that began back in 2010.

In GE’s words, ecomagination is:

“GE’s business strategy to create new value for customers, investors and society by helping to solve energy, efficiency and water challenges. It is our belief that, through a constant commitment to innovation, we can design and deliver great economics as well as great environmental performance.”

When it first started in 2010, GE deployed $1.8 billion into the program. That same year, the Company generated $18 billion in revenue from products and services developed through ecomagination.

It’s been such a successful venture that ecomagination revenues are growing at nearly twice the rate of GE’s total company sales.

Meanwhile, the program is on track to help lower GE’s greenhouse gas (GHG) emissions by 25% in 2015 from 2004 levels.  That’s over 6 million metric tons removed.

Water use is also expected to be reduced by 25% in 2015 from 2006 levels — nearly 4 billion gallons worth.

All of these milestones point to one underlying objective for the company: maximum return at a reduced cost.

It’s a lofty goal to be sure…but here’s how they’re hoping to achieve it.

Cranking Up The Wind

It’s well known that GE has been a long-time player in wind energy.

It currently has a stable of 10 different wind turbines for sale, along with a variety of storage products to harness and capture the energy generated by them.

Since buying Enron’s wind business in the mid-2000’s when the infamous energy company went bankrupt, GE now currently has over 17,000 turbines in operation around the globe.

While the majority of its turbines are designed for onshore use, GE has its eyes set on the bigger offshore market that’s still in the early stages of development.

Offshore wind is more abundant, stronger, and tends to blow more consistently than onshore wind, according to the Department of Energy.

The DOE estimates that offshore wind off the coastal shores of the US and the Great Lakes could generate more than 4,000,000 MW of capacity.

To capture some of that abundant energy, GE offers a massive 4.1 MW offshore turbine.

This machine includes direct-drive technology for fewer moving parts, built-in redundancy in the generator and converter, and in-situ repair capabilities, which eliminates downtime.

As alternative energy development continues to drop in costs, we should see increasingly more offshore wind farms being built. And chances are, a number of them will be using GE turbines.

And if that weren’t enough, GE’s also looking to re-invent the wheel on how we drill for oil…

A New Way To Frac

General Electric is looking ahead to the next phase in drilling — which is to do it as sustainably as possible.

You see, one of the biggest gripes that environmentalists have with fracking — other than the very practice of drilling itself — is the large volume of water that it requires.

In a report by sustainability watchdog Ceres, the approximately 40,000 wells drilled since 2011, which use fracking, have consumed some 97 billion gallons of water.

That’s nearly as much water as used by 30 cities with a population of 100,000 each.

With water already at a premium, hydraulic fracturing as it stands simply isn’t a viable option over the long haul.

Recognizing this, GE’s partnered with Norway-based Statoil ASA (NYSE:STO) to develop an innovative technique to frack without water.

Part of the new ecomagination investment will go towards finding a way to utilize CO2 instead of water to fracture shale rock in order to draw out trapped oil and gas resources.

They intend to collect CO2 at the wellhead, recycle it, apply it during fracturing, then collect the CO2 once more and repeat the process.

The challenge will be in figuring out how the CO2 will carry proppant, which is the sand used during water-based fracturing to keep the shale fractures open.

But once they overcome this challenge, GE envisions the process can be repeated safely over and over again.

Final Thoughts

Out of the two innovations, GE’s offshore wind turbine is already available on the market…so all it needs now is for the wind segment as a whole to gather momentum.

America may still be caught up in the shale energy boom for some time, so GE is hopeful that the Asian and European markets will continue to increase their interest in this promising power source.

By all accounts, we’re already seeing tremendous growth potential in this area.

In the UK, wind energy has been partly responsible for the country’s lowest demand for natural gas in 15 years.

Power prices have been slashed by nearly a third in Spain as surging wind energy output continues to drive down costs.

Germany’s wind power output in February was 6.14 terrawatt hours — 90% greater than a year ago.

China, despite its “all the above” approach to developing a range of energy resources simultaneously, also led the world in 2013 by investing $61 billion in solar and wind power generation.

Wind power in China now makes up 2% of total electricity generated, up from 1.5% in 2011.

Europe remains the leading market for wind power, having installed over 109 GW of capacity in 2012, according to a new study by Grand View Research.

However, Asia, which accounted for 35.6% of global capacity in 2012, could overtake Europe by as early as 2020.

So as you can see, long-term planning is contributing to GE’s future success.

As the sustainability trend kicks into high gear in 2014, look for GE to close on some lucrative contracts soon.

Yours in profits,
Todays top stocks to buy
John Holt
for Top Stock Millionaire
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