GE, Google Boost Efforts For Improved Power Grid
Wall Street Journal, September 18,
2008.
General Electric Co. and Google Inc. said they will jointly
ramp up their efforts to prod the U.S. government to upgrade the nation's
electrical-transmission lines so that the grid can better accommodate more
renewable energy.
Both companies sell technology that would benefit from an
improved grid.
GE has built one of the world's biggest wind-turbine businesses
over the past few years, and Google makes computer software it says could help
facilitate the introduction of more renewable energy to the U.S.
grid.
The announcement comes as Congress is considering separate
legislation that would open new areas in the U.S. to oil drilling and renew
federal tax credits for wind and solar energy that are due to expire at the end
of the year.
GE Chief Executive Jeffrey Immelt and Google CEO Eric Schmidt
called on Congress to continue the renewable-energy tax credits.
Wind energy was the second-biggest source of new electrical
capacity in the U.S. last year, behind only natural gas, according to the
American Wind Energy Association, a trade group. Still, wind power provides only
about 1% of total U.S. electricity.
Taking into account the benefit of the tax credit, the
per-kilowatt-hour cost of wind energy has dropped over the past five years from
about 15 cents to about eight cents, Mr. Immelt said, adding: "That makes wind
very competitive with coal."
But the tax credits have been short term, requiring Congress to
renew them frequently. That has led to a boom-and-bust cycle in the wind
industry that advocates say has hampered greater growth.
Mr. Immelt has largely staked his legacy on GE's clean-energy
efforts, a push the company calls "Ecomagination." The company has said revenue
from that effort will grow to $25 billion in 2010, up from $6 billion in 2004,
with products ranging from hybrid locomotives to wind turbines.
Google hopes renewable energy can help it lower the costs of
running its data centers, one of its greatest expenses. To that end, the
Internet search giant has invested tens of millions of dollars in wind and other
renewable-energy technologies. Last year, the company said it would invest
hundreds of millions of dollars from its corporate and nonprofit arms in
businesses working toward generating cheaper electricity.
Beyond the tax credits, Messrs. Immelt and Schmidt said their
companies will work together to lobby for government policies to expand the
electrical grid to accommodate more renewable energy.
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Google and General Electric announced Wednesday that they
would work together to push the development of renewable energy.
The companies said they would team up to lobby the federal government to
modernize the electrical grid and collaborate in the development of technologies
for plug-in vehicles and geothermal energy.
"We are trying to make renewable energy cheaper than coal energy," Google
co-founder Larry Page said at a news conference Wednesday afternoon.
The partnership was unveiled at Google's annual Zeitgeist conference, a
two-day think-fest where Google's business partners are invited to Mountain View
to discuss global issues with leaders such as former vice president Al Gore and
Mexican businessman Carlos Slim, as well as celebrities including Leonardo
DiCaprio and Forest Whitaker.
Against a backdrop of continued financial turmoil, Google's leaders said
their business was in good shape and unlikely to experience a direct impact from
the current crisis.
"The company has a large amount of cash in very boring investments," Chief
Executive Eric Schmidt told reporters. As of June 30, Google had $16 billion in
cash and securities and other current assets.
Schmidt said Google plans to move ahead with a previously announced deal to
provide search-advertising services to Yahoo, despite scrutiny by regulators in
the United States and Europe. Schmidt said that his company had anticipated
there would be objections to the deal, and that it is carefully structured to
comply with antitrust regulations.
"We have probably not explained it well enough," he said.
Advertisers have expressed concern that the pact would lead to an increase in
the cost of advertising brokered by Google. Page pointed out that the price of
advertising is not set by Yahoo or Google but in an auction where advertisers
decide what an ad is worth to them.
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