General Electric is making a commitment to a marketing, investment and energy policy program that addresses energy and environmental issues. This represents an important moment in the field of energy.
GE has now confirmed what many of us in the energy efficiency marketplace have known for some time: the energy/environmental sector can be a significant new business opportunity with robust revenue and profit streams. In addition, there are explosive job creation possibilities. It is not just another burden on businesses, but a way to control energy costs and improve global competitiveness.
This new GE initiative looks like a new enlightened level of capitalism whereby businesses can use an approach I call, "practical environmentalism."
In the current context, the United States has a cumbersome process for providing sufficient sources of electricity. On one side is the business community, including the utility, and on the other side is government and the various environmental groups. In addition, various media outlets including The Wall Street Journal, have acted as intermediaries in the energy debate.
There has been one problem.
Few have been willing or able to discuss the economics of energy and environmentalism.
General Electric and many other U.S. companies realize the next frontier for further economic competitiveness and environmental improvements can be found at their own facilities. This trend is especially significant since U.S. businesses are the largest consumers of energy.
In particular, GE has set a series of "green" goals for itself, including doubling its research and development budget to $1.5 billion for new environmentally friendly technologies, doubling its sales of eco-friendly technologies and services within the next five years to $20 billion, reducing its greenhouse gas emissions by 1 percent in 2012 while growing its overall sales by 35 to 40 percent, improving its energy efficiency by 30 percent by 2012, and reporting publicly on its progress toward carbon reductions, better known as greenhouse gases, on an annual basis.
U.S. businesses, rightly or wrongly, have been branded as some of the country’s worst polluters. So who can blame them when they seize the initiative by reducing significant amounts of electrical consumption in order to cut energy costs and improve their environmental footprint at the same time? In GE’s case, they have promised a 30 percent reduction in electricity consumption by 2012.
There is one over-riding reason why the business community can have such a large effect on the economics of energy and the environment: They use about 70 percent of all electricity produced in the United States. This means the business community can employ large-scale energy efficiencies that would have the same effect as reducing the entire energy consumption of whole towns and cities.
The ultimate goal of this new economic model is to reduce enough energy costs to justify the purchase of the energy efficient products or services, with a good solid return on investment.
The most important economic development and environmental benefits to this capitalistic approach are: (1) It is entirely voluntary; (2) It is by definition economically justifiable; (3) The decision makers are the ones who write the checks; (4) It will take tens of thousands of megawatts off the grid, thereby putting downward pressure on electric rates for both commercial and residential consumption; and (5) It can be employed today without legal or political intervention.
Stephen Heins is the vice president of corporate communication for Plymouth-based Orion Energy Systems.
July 8, 2005, Small Business Times, Milwaukee, WI
