...market in Europe — in the world, actually — is Germany, a country that is really not known for its abundance in sun, right? [The solar marker in] Germany grew by 90 percent last year.
Is geography ever a problem? You can't really expect solar to do well in Alaska.
You do want sunshine, but there are some subtleties in the technology. For example, thin film can generate more power with less sunshine versus conventional technology. But in general, the more sunshine there is, the more electricity you're going to have to generate. You're always going to produce more in California, Arizona, Nevada than, say, in Minnesota.
Now how about coal gasification? A lot of start-ups have recently landed venture capital money for this.
We acquired ChevronTexaco's gasification technology about a year ago, and we've been working on that, and we believe that is going to be a significant growth opportunity for it. It is certainly much cleaner, and we are close to getting the cost to a point where it's going to be competitive with pulverized coal — very close. It's still a little bit more expensive but we recently received our first order.
It just makes sense. It's less polluting. You're gasifying and burning it like natural gas. And the technology has been around a long time. The Germans had something like this during World War II.
And there is a lot of coal, not only in the U.S., but in China and elsewhere.
How about wind?
Wind has been a tremendous growth story for us. When we acquired Enron's wind business — in 2001, I believe — the revenues were about a few hundred million, and in '06 we're expecting $3.5 billion.
Europe has been very big for the past couple of years. The US now is booming. As the turbine — the machines — get bigger, the cost will come down. The turbines are getting larger, and the diameters on the blades are increasing, and so they can capture more wind.
We believe shortly wind is going to be competitive with centralized generation — particularly with turbines located offshore. This is now the major growth initiative.
Do you mean offshore as in something that would resemble an oil platform?
Well, no. These are wind farms anchored to the sea bottom, not too far offshore. There are good winds there, and you don't have as many issues with land use.
Are emerging nations looking at alternative energy technologies? The additional expense sometimes has a tendency to push these ideas into established markets. China has been kind of the vanguard of how to make a country really dirty.
Actually, cleaner energy is really no longer limited to Europe and the US. I think just about every country is concerned about cleaner environment. Thailand is one of the countries promoting solar and wind.
Are you doing anything in wave? A lot of experts shake their heads when someone proposes trying to install this sort of heavy equipment in stormy seas.
We're evaluating it. When you look at statistics on solar... I've read somewhere that if you covered 7 percent of Arizona with solar panels, it would be sufficient to power the entire US. It sounds fantastic, but you aren't going to do that. The same logic applies to wave. Yes, there may be sufficient potential wave power, but how much area do you need? And where do you put it? And what are the technology issues? It's early.
Now onto fuel cells. I'm just guessing where GE is mostly looking at residential fuel cells.
Well, actually our fuel cell effort is focused on not necessarily the residential and the small commercial, but bigger systems, so substation megawatt-plus systems. We also have our global research centre working on the hydrogen economy. It's still early.
How would a megawatt fuel cell substation operate anyway?
In the US and in a lot of the developed world, we believe our utility customers, instead of building peaker power plants, may opt for putting a small 1-5MW fuel cell hybrid in a substation. These would be solid oxide fuel cells
