Google and GE in energy alliance

By Richard Waters in San Francisco
Published: September 18 2008 00:09

Google and General Electric on Wednesday announced an unusual alliance to promote greater use of renewable energy in the US.
The internet and manufacturing groups said they would combine some of their lobbying muscle in Washington and co-operate on technology projects where GE’s engineering and Google’s software could advance the use of renewables.

The alliance reflects a shared view that sources of renewable energy such as wind and solar power could quickly be used to meet a significant proportion of national energy demand.
“Clean energy is eminently doable, eminently solvable,” said Jeff Immelt, chief executive of GE.
Under Mr Immelt, GE set out three years ago to promote new “clean” technologies, under an initiative dubbed “Ecomagination”.
Mr Immelt acknowledged that the effort had drawn scepticism and suspicion from some quarters, particularly given GE’s involvement in many old, contaminated industrial locations.
But he said that sales of products and services that fell under the initiative had risen to $18bn a year, up from $4bn-$5bn at its launch.
Although less central to its current business, Google has been involved in a number of clean energy initiatives, from helping to launch a tech industry body to promote more energy-efficient data centres to commissioning the largest private US solar power system for its Silicon Valley headquarters and investing in alternative energy start-ups.
The companies said that the first fruits of the alliance would involve joint lobbying in Washington to promote an expansion of the US electricity transmission infrastructure to draw on more renewable energy sources.
They will also lobby jointly for the use of more information technology in the national electricity grid to enhance its efficiency, creating something known as a “smart grid”.
At a technology level, the companies said they would work together on projects to develop geothermal sources of energy and to optimise the use of electricity grids for plug-in electric vehicles.
The joint effort appeared to be timed to catch a new political direction in Washington, with both presidential candidates promoting greater investment in renewable energy technologies.
“There’s no such thing as a free market,” said Mr Immelt. “It needs a little catalyst for the government to say, ‘This is what we would like to see done,’ then the entrepreneurial dollars will flow to that.”
Mr Immelt stopped short of calling for extra financial incentives to foster renewable energy, but said there was a need for existing investment tax credits that expire at the end of this year to be renewed for a longer period.
The persistent uncertainty around the tax incentives, “causes immense volatility around the supply chain that makes the costs go up”, the GE boss said.
Copyright The Financial Times Limited 2008