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GE Energy Infrastructure (33.5% of Revenue)[1]: focuses on the development of energy infrastructures. GE Energy sells energy technologies such as gas turbines, generators, and steam turbines to power companies and industrial plants.[2] GE Oil and Gas supplies equipment such as drilling systems, floating production platforms, compressors, and turbines for the oil and natural gas industry.
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Products and Services
- Energy
- The energy segment of GE Infrastructure provides renewable energy products including wind turbines, nuclear energy reactors, solar panels, and so forth. The segment also provides training in the use of its products, as well as financial management plans to make the transition to renewable energy as affordable as possible.
- Energy Financial Services (EFS)
- EFS invests heavily in the improvement of energy and water technologies. Being a part of GE's Ecomagination project, EFS heavily emphasizes renewable energy and cutting the emission of pollutants.
- Oil & Gas
- This segment of GE Infrastructure provides oil- and gas-related products including pipelines, gas turbines, and valves. Furthermore, it also offers services aimed at maintaining the safety and efficiency of its products.
Trends and Forces
Environmental Responsibility
Both federal and state agencies have put pressure on GE to clean up its operations' wastes. The annual cost of this environmental cleanup has risen sharply, doubling from $100 million in 2005 to $200 million in 2006.
GE has also started a project known as Ecomagination, reportedly investing $700 million in 2005 for cleaner technology research. The initiative has created products such as:
- L2500+Marine: an airplane engine that reduces emission of nitrogen oxide by 62% and sulfur dioxide by 93%.
- Evolution Series Locomotive: this locomotive uses a 12-cylinder diesel engine that produces the same amount of energy as its 16-cylinder predecessor while emitting 40% less nitrous oxide.
- Earth Rewards Platinum MasterCard: a credit card that rewards customers with cash back while donating a percentage of purchases to environmental organizations.
- Compact fluorescent lighting.
Products and services resulting from Ecomagination research earned $6 billion in 2004, $10 billion in 2005, and $12 billion in 2006. In 2006, GE spent a total of $900 million on green-technology R&D.
Alternative Energy
Industrial revenue rose 13% in 2006, due in part to an increase in the sales of power generation equipment. The financial and environment costs of oil are driving the ever-growing market for alternative energy sources, which benefits GE's energy business. In particular, GE's revenues from the sale of wind-powered turbines have more than quadrupled in the past four years. In addition to producing wind turbines, GE has increasingly bought ownership stakes in wind farms, having invested $4 billion in such facilities as of summer 2008.[3]
Competition
Energy systems
GE is the single largest manufacturers of natural gas power systems, with a global market share of around 40%. Other large players are Alstom and Siemens AG (SI), with nearly 30% and 20% market shares, respectively. GE's share of the wind energy business stands at around 15% of the global market, after competitors Vestas and Gamesa. Its 2002 purchase of Enron's wind assets has positioned GE for future expansion into this renewable energy market.
References
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