Page last updated at 10:19 GMT, Thursday, 18 September 2008 11:19 UK

Google and GE in energy deal

By Maggie Shiels
Technology Reporter, BBC News, Silicon Valley

Electricty pylons
Smart grid technology lets utilities more efficiently manage electricity

The internet giant Google has teamed up with technology multinational General Electric to develop a "smart" electric power grid and promote clean energy.

Both companies want to make renewable energy more accessible and useful.

In a joint statement they said: "Our economic, environmental and security challenges require we use electricity more efficiently and generate it from cleaner sources."

"Clean energy is eminently doable and solvable," said GE ceo Jeff Immelt.

"This just makes good sense," said Google CEO Eric Schmidt.

The plan was unveiled at Google's Mountain View headquarters in California where the firm was holding its annual Zeitgeist, a conference bringing senior executives from around the world to discuss the pressing issues of the 21st century.

Both GE and Google said they would leverage their lobbying muscle in Washington to try and persuade politicians to push for major policy changes in energy.

The statement by the two firms said that "policy is a major impediment to building a 21st century electricity system."

Mr Immelt said while his instinct is to keep government at arm's length, in this case there is a vital role for politicians to play.

"There is no such thing as a perfect free market. It is a market that needs a little catalyst from the government and then I think the entrepreneurial dollars will flow to that."


During an interview session at the conference, Mr Schmidt quizzed Mr Immelt about GE's decision to focus on clean technologies under an initiative dubbed "Ecomagination."

GE is now one of the biggest players in the wind power industry and is involved in developing hybrid locomotives, water reuse solutions and photovoltaic cells.

The GE boss admitted to the audience that the company's eco game plan did not meet with approval from many sectors of business when it was initially unveiled in 2005.

Wind power is far ahead of other renewable energy sources for reliability

"We had a lot of suspicious people around but we felt the time was right to attempt to do something like this."

He said the move has paid off as sales of products and services in this area have grown from $4-$5bn (£2.2-2.7bn) at its launch to $18bn a year.

Mr Immelt also boasted of his decision to buy Enron's wind business out of bankruptcy in 2003 for $300m and revealed that it now makes between $7-$8bn in revenues.

"I have done some bad business deals in my day, but this isn't one of them," joked Mr Immelt.

Google is also involved in clean energy initiatives that include geothermal, solar and wind-generated electricity.

The search giant has maintained that the benefits of renewable electricity can not be fully realised without updating US power transmission lines into a "smart grid" that lets people track and control what types of power they use and when.

Light bulb
Both firms will push to modernise the electrical grid

"This 21st century electricity system must combine advanced energy technology - a major GE focus - and cutting edge information technology - a major Google focus," said the joint communiqué.

"We believe that by combining our efforts, along with other relevant businesses and industries, we can advance critical policy change in Washington and develop new technologies and services for consumers."

GE and Google plan to work on technologies that will convert geothermal power into electricity as well as prepare the nation's grid for plug-in vehicles.

Dan Reicher, director of climate change and energy initiatives at, the charitable arm of Google, said both businesses feel they can make a real difference.

"A smart grid is something we desperately need in this country and we humbly think we might have something to contribute."

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