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Google and GE team up on clean-energy policy, tech

Giants in their respective fields, the two companies plan to lobby for government energy policies to modernize the electrical grid and promote renewable energies.

General Electric and Google on Wednesday announced a collaboration to lobby for renewable energy policies and to jointly develop clean technologies.

During the Google Zeitgeist conference in Mountain View, Calif., Google CEO Eric Schmidt interviewed GE CEO Jeffrey Immelt onstage about the maturity of renewable energy technologies and current policies.

Google CEO Eric Schmidt Google

Schmidt said that the two companies will push for government programs to modernize the electrical grid, which would enable broader use of renewable energy.

"GE and Google will be advocating in Washington for the new and smarter grid," Schmidt said.

Their policy partnership will call for beefed-up transmission capacity so renewable sources, such as wind, solar, and geothermal, can be further deployed.

Wind power is far ahead of other renewable energy sources in being reliable and cost-competitive with fossil fuel power plants, Immelt said. GE's wind business, one of the largest in the world, will bring in more than $7 billion this year.

However, wind farms are often placed away from the centers of high electricity use. To greatly expand wind energy, which now makes up less than 1 percent of U.S. power generation, more transmission lines are needed.

"If we really want to drive renewables to where it could be, we are going to need more transmission capacity, and the government is going to have to (intercede) to make that happen," Immelt said.

GE CEO Jeffrey Immelt Martin LaMonica/CNET News

Right now, renewables other than hydroelectric power represent only a few percent of the overall electricity generation in the U.S. Immelt said that getting 20 percent from renewable sources by 2020 would be possible to achieve.

"Actually, this isn't hard. The technology exists. It doesn't have to be invented. It needs to be applied. It needs to be priced for carbon and things like that. This can happen," Immelt said.

Technical collaboration
On the technology side, the two companies intend to develop smart-grid technologies, plug-in hybrid vehicles, and enhanced geothermal systems, where underground heat is converted into electricity.

Smart-grid technology lets utilities more efficiently manage electricity on the grid. And through smart meters and in-home displays, it lets consumers better understand and control home energy use.

GE and Google will work on utility software to make the grid more efficient, and on software for home smart-grid equipment, Immelt said.

Similarly, the two firms will develop software to help utilities better control plug-in hybrid cars, which can be used to deliver power onto the grid during peak times. A flexible power grid is important because some researchers have concluded that an onrush of plug-in vehicles could strain the grid and lead to construction of more power plants.

In the area of geothermal, GE and Google will create visualization software and power conversion technology. Google recently invested in an enhanced geothermal systems start-up, while GE does not have a large business in this area now.

Public-private line
In discussing policy and technology, Immelt and Schmidt said that the clean-energy field has been underserved.

Immelt noted that the energy business typically spends about 1 percent of revenues in research and development, compared to 7 percent in health care.

Congress is currently debating measures to open up more oil and gas drilling off the coast of the U.S. this week. But existing tax credits for investments in renewable energy projects are set to expire at the end of this year, which energy executives say is slowing the industry and pushing renewable energy companies to other countries.

Both Schmidt and Immelt said that the government needs to play a more active role in setting an energy policy that promotes diverse energy sources and environmental protection.

GE executives have lobbied regularly in Washington for the extension of the renewable energy tax credit. The company is invested in several different energy businesses, including natural gas, so-called clean coal, and nuclear.

But Immelt said that the renewable energy business needs a 10-year tax credit, which would serve as a catalyst for the industry and could then be phased out.

"I'm a lifelong Republican. I'm a believer in free markets," he said. "I think we worship false idols over time. There is no such thing--in all the businesses we do--that government doesn't play a role as a catalyst."

Schmidt last week said there was "a total failure of political leadership" in addressing climate change, and on Wednesday said that government spending should target socially responsible programs.

Google's green gene
Although it's not directly related to its core search business, Google and its top executives have been active in the renewable energy business.

Last year, its philanthropic arm launched a program called RE<C (for renewable energy less than coal) to make clean energy more cost-competitive.

So far, has invested altogether tens of millions of dollars in wind, solar, and enhanced geothermal start-up companies. Last year, it filed a patent for a floating data center that would be powered primarily by wave energy.

GE, which touts its Ecomagination green-technology initiative, is heavily invested in energy, water, and energy financing.

Updated with link to blog and YouTube video of interview.