IMAGINATIVE
ENERGY?
Interview for Refocus Magazine
Clean
energy is in vogue as yet another oil crisis looms, but does
it make enough money? One of the largest global corporations
with a workforce of over 300,000 employees worldwide, General
Electric, is convinced that's the case and is aiming to carry
corporate America to new horizons with what it calls 'ecomagination'.
Ralph Kappler spoke to GE recently to find out more.
Let's not get carried away here too quickly,
it is already over 127 years since the founder of the General
Electric Company contemplated: "I never perfected an invention
that I did not think about in terms of the service it might
give to others. I find out what the world needs, then I proceed
to invent". Thomas Edison invented the electric light bulb,
the first true use for mass electricity. It was also the Victorian
age when Sir William Grove designed the first hydrogen fuel
cell. So in this context is ecomagination really that imaginative?
"Ecomagination
is grounded in the core elements of our business. It takes programs
and practices, like new product innovation and environmental,
health and safety and elevates the focus and the commitment
in ways that will provide a greater quantifiable and measurable
benefit to our customers, employees and shareholders,"
says Katharine Brass, ecomagination program manager, GE Energy.
In May this year General Electric (GE) launched a breathtaking
campaign to promote an initiative that entails accelerating
annual investments in cleaner energy technologies to $1.5 billion
by 2010 and committing the company to improving its own energy
efficiency 30 percent by 2012. Ecomagination, says GE chairman
and CEO Jeffrey Immelt, aims to "focus our unique energy,
technology, manufacturing, and infrastructure capabilities to
develop tomorrow's solutions such as solar energy, hybrid locomotives,
fuel cells, lower-emission aircraft engines, lighter and stronger
materials, efficient lighting, and water purification technology."
"Since
Edison's days of leading technological discovery, GE's mission
has remained steadfast to not only meet the world's changing
needs, but to anticipate them", says Robert Gleitz, General
Manager of GE Energy's wind segment. GE's Energy Division expects
2005 revenues for wind energy to exceed $2 billion. GE Energy
has commitments for 2,400 megawatts of new wind capacity worldwide,
including 1,650 megawatts in the U.S. Today, the global environment
is in urgent need: skyrocketing demand for oil and natural gas
is expected to exhaust known reserves by 2045; changes are emerging
in the global climate; and lack of access to clean water currently
endangers more than a billion people - a mounting crisis where,
by 2025, half the world will live in water-stressed areas.
"We
are going to solve tough customer and global problems and make
money doing it." says GE's Jeff Immelt in understated fashion.
GE set out to doubling its investment in cleaner technologies,
to the tune of $1.5 billion annually by 2010. It estimates its
revenues from environmentally preferable products will also
double to $20 billion a year from wind, solar, higher performance
fossil fuel based energy and cleaner transportation technologies.
Moving
clean reaps rewards
With record numbers of tormenting hurricanes
pounding the Gulf coast this year, the horrifying images of
New Orleans flood victims and sky-high oil prices occupying
the public mind, sources of clean energy are very much in fashion.
The aftermath of Hurricane Katrina has also focused minds on
the extent of global reliance on fossil fuels, generating interest
from both the public and investors in the renewables sector.
What would have been regarded as a preposterous notion in global
media marketing circles some years ago, has now turned into
a perfectly reasonable scenario. Last month the prestigious
American Business Media Awards recognized GE as the Grand Prize
winner for its ecomagination campaign in New York.
A
culture shift is under way. GE, which also owns NBC and Universal
Pictures, is suddenly challenging global market leaders in wind-turbine
production, and its ads are creating an alluring picture of
a variety of other clean technologies that the corporate giant
produces. Recognition
for GE's efforts in the clean energy field continues. At Euromoney's
Annual Renewable Energy Finance Forum (REFF), GE found the spotlight
that bit brighter. During the forum's annual awards ceremony
a few weeks ago, GE was announced as the winner of the Clean
Technology Supplier award at the event held at the London Royal
Garden Hotel. Robert Gleitz, General Manager of GE Energy's
wind business, was humbled when the London news reached him
while he was serving customers at the Husum wind industry fair
in Germany. "GE Energy is absolutely delighted to receive
recognition for technological advances from an industry driven,
international finance forum. GE has a long standing history
of product innovation and ongoing product development. ecomagination
further demonstrates our company-wide commitment to create and
enhance products and services that help customers improve their
environmental and operating performance." GE has devised
a strategy to secure a fair share of what the International
Energy Agency (IEA) anticipates to become a $16,000 billion
worldwide energy investment market until 2030.
Critics
hold their fire…just
Most admired company or not, GE has been
in the Eco protestors sights for years because of its dumping
of polychlorinated biphenyl (PCBs) in the Hudson River in New
York. Eco campaigners and climate change advocates pointed accusing
fingers at GE's environment record during the 80s and 90s. Ironically,
it was Jeff Immelt's predecessor and the company's former CEO,
Jack Welch, who had dismissed the calls as "bad science"
and spent millions lobbying against environmental regulators.
The down to earth Sierra Club, America's oldest, largest and
most influential grassroots environmental organization with
more than 750,000 members, voiced concern over a possible ecomagination
greenwash. "When you scratch beneath the public relations
surface, I'm afraid they have unfinished business in terms of
environmental protection," warned Chris Ballantyn, director
of the Sierra Club Hudson River Program, referring to GE's stalling
on cleaning up potentially cancer causing PCBs that leaked into
the Hudson from its factories. Frank O'Donnell, president of
Clean Air Watch, is blunt about what he perceives as a $90 million
ecomagination PR blitz: "You might call it 'extreme makeover'
or perhaps simply 'greenwash' ".
However,
a U.S. Government ruling in 2002 has slowly convinced the company
to change its stance and begin producing tests and engineering
designs for clean up operations. "Ecomagination is building
on past successes and recognizing that any company that manufactures
a wide range of products has inherent environmental challenges,
some of which are not obvious at the time. Some examples of
our environmental efforts that continue within the ecomagination
program are our reduction in wastewater discharges, improvements
in air emissions and reductions in spills and releases. Since
1996, each of these areas has realized an improvement of more
than 60%. Our manufacturing facilities are currently ranked
#1 in US OSHA and Mexico VPP sites and we are now a member of
the Dow Jones Sustainability Index," says Katharine Brass.
Could
Ecomagination accelerate the emerging clean-tech economy? 30
years after PCB chemicals GE discharged in the Hudson River
were banned as an environmental pollutant, a deal was finally
reached with the Environmental Protection Agency and Department
of Justice to begin removing contaminated sediment in a two
stage clean-up costing up to $750m. GE agreed to start dredging
parts of the Hudson River in upstate New York. The Hudson clean
up shows that GE means business with its green power campaign.
This deal not only coincided with the ecomagination campaign
launch, ecomagination simply wouldn't work without GE wholeheartedly
walking the talk.
Bold move
Ecomagination is a bold move even by GE
standards. It represents a strategic shift that could catalyze
competition among some of the world's largest companies to accelerate
the emerging clean-tech economy. This invigorating effect will
be all the greater for GE's reputation for carrying out its
promises. GE is the biggest but not the first company to perceive
a competitive advantage in sporting environmental credentials.
Lord Browne of BP pledged to cut his oil company's emissions
by 10 per cent from 1990 levels by 2010, and announced in 2002
that it had achieved its goal eight years early.
While
Bush officials are still insisting that federal action on climate
change will hamper industrial growth in the United States, corporate
leaders are recognizing that it's essential to their firms'
economic survival. General Electric, Ford Motor Company, Duke
Energy, Exelon, and JPMorgan Chase are among a growing number
of Fortune 500 companies that in recent months have voiced support
for a federal crackdown on carbon dioxide emissions. But few
Fortune 500 CEOs thus far see the opportunity as a strategic
path for their company. Since GE's CEO is committed to ecomagination
it has a good chance of succeeding. He made the announcement
and is staking his personal reputation on it. Rather than proposing
a vague agenda, GE announced an initiative that has both a grand
vision and specific goals and timetables. If GE really does
want to make money out of clean technologies, something influential
will probably happen.
"The
effect of the world's biggest company taking a stance on green
issues will be felt in smaller organisations around the world",
says James Cameron, CEO of Climate Change Capital, a boutique
merchant bank. "A million PowerPoint presentations will
now have a slide in them on GE's ecomagination," predicts
Mr Cameron. That really is good news. And the jury is out there,
or in Mr. Immelt's words the customers, to cast the verdict
with their pockets on the visionary ecomagination business drive.
How much of GE's estimated 20% industrial sales are finally
generated through environmentally preferable products such as
smart renewable technologies will in the end decide whether
ecomagination becomes a very expensive greenwash, or in deed
one of the boldest business initiatives the world has witnessed
at the dawn of this century. ©
Refocus Magazine, December 2005
"Spectacular
PR Coup to Push
Nuclear Agenda"
The
public, politicians and the media are
being taken in by a carefully planned public relations campaign.
Its mission: to push nuclear power back on the political agenda,
rebranded as the new "green alternative".
By Jonathan Leake & Dan Box
(source: New Statesman)
In
the plush surroundings of the Army & Navy Club on London's
Pall Mall, Mike Alexander, chief executive of British Energy,
was holding court. Assembled before him were more than a hundred
leading figures from the UK's energy industry - all there at
the behest of the Energy Industries Club, an industry body that
keeps its membership secret. The point of the event, held just
a few weeks ago on 15 March, was to hear a keynote speech, to
be delivered by Alexander, with the title "UK Nuclear Energy:
fuel of the future?" It was not, however, a purely private
affair. Around the room were a selection of top opinion formers:
analysts, corporate traders and members of the media. The journalists
could not report the event directly - the invitations were based
on so-called Chatham House rules, meaning it was for "background
use only". What they were meant to take home was a message:
nuclear power is coming back.
Alexander's
speech itself was simple. Within the next 20 years, he said,
Britain's nuclear power stations will come to the end of their
operating lives. To meet the country's climate-change targets,
they must be replaced with some form of power generation that
does not produce the greenhouse gas carbon dioxide. Anywhere
else, that line might have prompted some sharp questions. But
for Alexander, whose company owns two-thirds of Britain's nuclear
power stations, the audience was an unusually receptive one
- and not just because of the fine wines. They
laughed at his mockery of the nuclear-waste problem: his plants
produced a trivial volume of waste, equivalent to 24 double-decker
buses a year, he said. A ripple of "hear, hears" greeted
his suggestion that the next generation of reactors would produce
half that waste and a lot more power. And when he cracked a
couple of jokes about windpower, gusts of raucous laughter went
round the room. Taken
on its own, it might have seemed like just another business
lunch. For some of the guests, however, the proceedings were
a little familiar. They had heard the same arguments and met
the same people at a series of other events in the past few
months. It was all part of a carefully planned strategy. From
being a piece of history, the nuclear industry - a fading dinosaur
that has wasted billions and left a toxic legacy that will cost
billions more - is pushing itself back into the headlines, rebranded
as the only source of the cheap, secure and clean energy demanded
by modern Britain. The real "green" alternative.
Just
a few days after the Army & Navy Club event, some of Britain's
most senior business journalists found themselves invited for
breakfast at the discreet St Stephen's Club in Queen Anne's
Gate, Westminster. Their
host was Amec, one of Britain's leading engineering companies,
and the menu of speakers was even more select. Sir David King,
the government chief scientist, Brian Wilson, the former energy
minister, and Dipesh Shah, chief executive of the United Kingdom
Atomic Energy Authority, each spoke about how Britain needed
nuclear if it was to stop the lights going out. Again the meeting
was on Chatham House rules, but this time Wilson confirmed what
took place. "The industry has been working together to
push nuclear power up the agenda recently," he said. "The
growing interest in climate change and security of energy supply
- plus the election - meant the time was right."
From a trickle to a torrent
Nuclear
power had been in the news earlier this year, but only sporadically.
It was after these and other events that the articles turned
from a trickle to a torrent - and suddenly nuclear was big news
again. Nothing had occurred politically. There had been no reports,
scandals, technical breakthroughs or new policies. What had
happened was that a group of journalists had taken the bait
offered them by a few canny public relations experts. It was
a spectacular PR coup, but how had it happened and who was behind
it? For those who were watching, the signs were there many months
ago when some of the biggest firms in the nuclear business began
a round of recruitment, taking on high-powered new media directors,
political advisers and public affairs companies. Last October,
British Energy appointed Craig Stevenson, formerly Monsanto's
top UK lobbyist, as head of government affairs. Then, in December,
BE enlisted Helen Liddell, the former energy minister, to provide
"strategic advice" on a short contract for a fee of
roughly £15,000 (Liddell has since been made Britain's
ambassador to Australia). All this was on top of the £1m
BE paid to another PR firm, Financial Dynamics.
Meanwhile,
the Nuclear Decommissioning Agency, the new public body charged
with cleaning up the mess from Britain's previous nuclear programme,
poached Jon Phillips, Heathrow Airport's head of communications.
He will cost well over £70,000 a year, and will have a
deputy and nine other press officers working under him. But
Phillips was the man who led the British Airports Authority's
successful campaign for a fifth terminal at Heathrow despite
furious public opposition. The nuclear industry needs people
with that kind of track record. At
the same time, Nirex, the waste disposal body that became independent
of the nuclear industry last month, has taken on the Promise
public relations firm to promote a multimillion-pound rebranding
and renaming exercise (this is on top of an exist- ing contract
with Good Relations). And last year the UKAEA employed Grayling
Political Strategy to help raise its profile. All
this activity, documented in trade magazines such as PR Week,
shows that in the year or so before the general election, the
nuclear industry slowly but surely put together a classy public
relations act. And it was not just targeting politicians and
the media.
In
briefings around the City, the energy companies have been scaring
the captains of British industry silly with warnings of how
half Britain's generating capacity - coal as well as nuclear
- will have to shut down by 2020. They did not have to exaggerate.
The widely shouted fact that all but one of Britain's nuclear
plants will have to shut by 2023 has obscured the similar fate
awaiting most of the country's coal-fired stations, which produce
36 per cent of the nation's power. They will close because the
EU's Large Combustion Plant directive will set efficiency and
pollution standards that most cannot possibly meet when it takes
effect in 2008. For
the nuclear lobby, Britain's increasingly desperate energy outlook
presented a golden opportunity. Over the past six months, the
result of the industry's PR drive has been a significant change
in the mood of major corporations towards nuclear power. Politicians
were carefully targeted, too. For example, the Nuclear Industry
Association, the trade association for British nuclear companies,
has secured for itself a role running the secretariat to the
all-party parliamentary group on nuclear energy. As the election
approached, its seminars became increasingly apocalyptic - warning
that if the government did not embrace nukes soon it would be
just a few years before the lights started winking out, with
Labour assured a place in history as the party responsible.
Coordinated
election build-up
Keith
Parker, chief executive of the NIA, confirms that the industry
carefully co-ordinated and exploited the build-up to the election.
"We discussed these things a lot," he said, "and
we did see the election as an opportunity. There were several
other things coming at the same time, such as the government's
review of renewables [due out in June]. It gave us a good chance
to raise the profile of nuclear power." The
campaign co-ordinated by the NIA was designed to focus not on
the historically dubious benefits of nuclear power but on the
shortcomings of all the alternatives. Windpower and other renewables
were "intermittent and unreliable"; a switch to gas
meant relying on "dodgy" foreign exporters; and coal
was simply primitive. But the campaign was also carefully finessed:
none of the rival energy sources was dismissed outright; instead,
the lobbyists stressed the need for a mixture of generating
capacity - with a revived nuclear industry at its heart. Civil
servants at the Department of Trade and Industry also saw the
election as a chance to promote nuclear power. A few days after
5 May, a confidential DTI briefing paper arguing the case for
nuclear energy was leaked to the Sunday newspapers. Written
by the director general of the department's energy group, Joan
MacNaughton, for the incoming Secretary of State for Trade and
Industry, Alan Johnson, it said: "The case for looking
at the nuclear question again quickly is that if we want to
avoid a very sharp fall in nuclear's contribution to energy
supplies (some fall is certain and has already begun), we should
need to act soon given the long lead times (ten years?) in getting
a new nuclear station up and running."
As
leaks go it was audacious, blatantly aimed at ambushing Johnson
before he had even read his brief, let alone mastered it. But
it was also the culmination of a pattern of briefings in which
senior DTI officials have tried to swing the nuclear debate
their way. At an international energy conference in Paris last
June, the director of the DTI energy strategy group, Adrian
Gault, laid out the department's vision of how Britain would
get its electricity by 2050 and still cut greenhouse-gas emissions.
Fundamental to that vision was that nuclear energy would be
producing up to half the country's power. Gault's Paris speech
was delivered behind closed doors, but soon made its way on
to the front pages of the UK's national newspapers. His pro-nuclear
message has since been reinforced repeatedly by the DTI's highest-profile
personalities. The week after the election, Sir David King was
openly saying that, in order to hit Britain's climate-change
targets, "we need another generation of nuclear-fission
stations".
Consumers
to pick up the bill
The
DTI's commitment to building a new round of nuclear plants goes
back a long way and extends much further than mere speeches
and briefings. In 2001, the DTI nuclear industries directorate
signed up the department and Britain to taking part in an international
consortium to build the next generation of nuclear reactors.
Whichever designs are chosen they will almost certainly be built
by an American or British company. For the UK (and the DTI)
a nuclear revival would mean billions pouring into science faculties
and engineering companies. This prospect could help explain
the growing interest being taken in the nuclear debate by august
bodies such as the Royal Society, the Royal Academy of Engineering
and the Institution of Civil Engineers, which have also been
discreetly lobbying the government to look again at nuclear
power. Last year the RAE put out a paper on electricity prices
suggesting that new nuclear plants could produce power far more
cheaply than even coal. For those with long memories, it was
reminiscent of the "power too cheap to meter" promise
made by Walter Marshall, one of the architects of Britain's
atomic reactor programme in the 1950s. But, tellingly, the RAE
has also told the government that it must create a market for
nuclear by ensuring the "long-term stability of electricity
prices". This is shorthand for the nuclear industry's real
agenda: a new system of subsidies to ensure it is never again
exposed to the chill winds of a free market. The industry even
has a name for it: the Security of Supply Obligation.
This
is what will lie at the heart of the next big lobbying push
- ensuring the obligation (to pay) falls directly on consumers.
Ian Fell, an RAE fellow and former professor of energy conversion
at Newcastle University who now works as a consultant to the
government and industry, has trodden the corridors of power
at the DTI many times. As an eminent insider, he is well placed
to have the last word on the nuclear charm offensive. "There
isn't exactly a conspiracy to bring it up the agenda,"
he comments, "but in the past few months civil servants
have been saying [to] wait till around the election, because
that's when nuclear power would become a big issue again. "It
happened as they predicted."
Jonathan
Leake is the Sunday Times environment editor
Dan
Box writes on energy for the Sunday Times