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GE: Green and European

The industrial giant’s new Munich research outpost puts renewable energy in high gear
September 1, 2005

Though still small potatoes compared to fossil fuels, renewable-energy technologies are experiencing explosive growth worldwide. Wind turbines, for example, are propagating at a greater rate than any other electricity-generating technology: global capacity surged 25 percent just last year. And Europe, with its high fossil fuel costs and generous government subsidies of “green power,” is the epicenter of this growth, accounting for two-thirds of wind power facilities installed in 2003.

None of this has escaped the attention of General Electric, which is opening a new research center near Munich, Germany. The $52 million lab will largely be devoted to renewable-energy technologies, including hydrogen fuel cells, wind turbines, biomass fuels, and photovoltaics based on polymers. It will also develop the electronics needed to tame variable electricity sources like wind and solar for use in buildings and in the electricity grid.

“To see a company like GE buying into the idea that future power sources are going to be renewables – and invest the research dollars both in the U.S. and the European center – bodes well for all the renewable technologies,” says Robert Thresher, a mechanical engineer who heads wind technology research at the U.S. National Renewable Energy Laboratory in Golden, CO.

The new lab, on the campus of the Technical University of Munich in Garching, Germany, is also helping crack something of a Berlin Wall that has long divided corporate and university research in Europe. The university recently began collaborating with GE, developing better agriculture-based fuels for gas turbines. “GE came at the right time,” says Christoph Hirsch, a member of the university’s combustion technology group. “German companies are more reluctant to work with academic researchers. And if they do, they often insist on tight nondisclosure and expect the state to fund the research.”

What’s more, through the Munich center, GE also aims to forge ties to local industries. The company is negotiating with BMW to collaborate on hydrogen storage and hybrid engines and sensors, says Hans Bornemann, head of business development for the new lab.

It’s all part of GE’s strategy to dominate the market for renewable-energy technologies. Two years ago, GE bought Enron’s wind business and expanded aggressively into the wind power market. Today, GE Wind Energy is one of the company’s fastest-growing divisions and is heading for world market leadership, having picked up another 9 percent of market share from 2002 to 2003, according to BTM Consult in Denmark. And in March, the company acquired the U.S. photovoltaics manufacturer AstroPower and now sells complete photovoltaics systems for homes. “In ten years, we will rule the world,” predicts Vlatko Vlatkovic, GE global technology leader for electronic and photonic systems.

The new center also reflects GE’s renewed commitment to technology development in general. Since 2001, GE has invested $100 million in its Niskayuna, NY, research headquarters and built a $64 million research facility in Shanghai, China. While the Munich lab is focusing on renewable energy, which consumes about half of its research budget, it will also develop sensor, medical-imaging, and automotive technologies.

GE’s aggressive research expansion in Germany brings the fight to its chief rival in the fields of power systems, medical technology, and lighting: Siemens. In fact, from Siemens’s headquarters in Munich to the new GE research center north of the Bavarian capital is just a 20-minute drive. And GE’s plans to research medical, sensor, and automotive technologies strike at the heart of Siemens’s business.

But Siemens has made a strategic decision not to pursue core renewable-energy production technologies; rather, it supplies parts, consulting, and maintenance to geothermal power plants and wind farms. So at least for the time being, GE has the wind at its back when it comes to renewables.

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