The chairman and CEO of General Electric Co. branded U.S. energy policy a failure in remarks to a smart grid conference yesterday, saying that other nations, led by China, are speeding past the United States in developing the next generation of energy technologies.
"It's just stupid what we have here today," said Jeffrey Immelt, who heads the largest U.S. new energy technology company, speaking to the GridWise Global Forum in Washington. "Energy is one of the places I worry about most," he added. "The rest of the world is moving 10 times faster than we are."
The United States will remain an underdog in clean energy competition unless Congress can get past its partisan deadlock and produce effective national energy policies, he said. In particular, the United States needs some kind of long-term price on carbon emissions and a national clean energy standard that does not exclude any fuel options -- including nuclear power, one of GE's key business areas, he said. GE is a member of the U.S. Climate Action Partnership (USCAP), which lobbied for the cap-and-trade climate bill that passed the House last year but died in the Senate this summer.
Energy "is an incredibly long-cycle industry. Without a market signal of some consistency, the right investments aren't going to be made," he said.
Immelt said that his company is committed to expanding its smart grid and clean energy businesses. If opportunities in the United States are blocked, GE will not wait for that to change, he said.
"I love this country," he said in a dialogue with New York Times columnist Thomas Friedman. "Really, I have such a great personal appreciation for what I've been able to do." But he added, "Business is business in the end. ... We're going to do all that stuff.
Pilot projects 'don't assure' leadership
"GE is not going to give up. ... We're going to keep investing in renewable energy. We're going to keep investing in the smart grid. ... [If] we take a hiatus here [in wind development], so be it."
He praised the Obama administration for launching a range of meaningful smart grid and clean technology pilot programs with economic stimulus funds, and called Energy Secretary Steven Chu "incredibly entrepreneurial. ... The DOE before this administration had no capability" to support clean energy development, he said. "Zero."
But the pilot projects don't assure future U.S. leadership in clean energy areas, he added.
DOE needs to tighten its research focus on new energy frontiers such as advanced batteries, for example, he added. "If you make 40 bets in batteries, you make none."
"On the smart grid, we've done nothing. ... We're probably not going to lead in nuclear power," he said.
Immelt was particularly critical of the U.S. regulatory framework for electricity, which vests authority over wholesale power sales with the Federal Energy Regulatory Commission while leaving oversight of retail utilities' prices and policies, and transmission siting, with state regulators.
U.S. energy regulatory system called 'a relic'
"The whole energy regulatory system, if we're really serious about it, is a relic," Immelt said. "It has fundamentally no basis in the modern world."
GE, with $157 billion in revenues in 2009, is a leading global producer of wind turbines, smart meters, nuclear reactors and grid technologies. It has spent more than $40 million to acquire solar power technology and invested $50 million more to prepare to launch production, he said.
Immelt said the United States has "phenomenal ideas" and "really good companies" in the clean technology and smart grid sectors. "This could be a great source of exports and job creation."
Asked about GE's decision to close its last remaining factory making incandescent light bulbs, in Winchester, Va., he said, "It is tough to keep a product alive for 100 years." GE is adding U.S. jobs in aviation and energy, he said. "Our [U.S.] employment will go up this year, and our factory jobs will go up."
Immelt said that global technology leadership requires four things: a big local market, technology innovation, a low-cost supply chain and supportive government policies. In the United States, the traffic light on those four areas is either yellow, for caution, or red, he said. Demand is weak. Innovation and supply chains are passable. Energy policy is halted in its tracks.
In contrast, China is "green, green, green, green," he said.