GE- Goldman Sachs Fourth Annual Alternative Energy Conference
1. Goldman Sachs
Steve Fludder
May 21, 2009
quot;Results are preliminary and unaudited. This document contains “forward-looking statements”- that is, statements related to future, not past, events. In this context, forward-looking
statements often address our expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “intend,” “plan,” believe,”
“seek,” “see,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties that could cause our actual
results to be materially different than those expressed in our forward-looking statements include: the severity and duration of current economic and financial conditions, including volatility
in interest and exchange rates, commodity and equity prices and the value of financial assets; the impact of U.S. and foreign government programs to restore liquidity and stimulate
national and global economies; the impact of conditions in the financial and credit markets on the availability and cost of GE Capital’s funding and on our ability to reduce GE Capital’s
asset levels and commercial paper exposure as planned; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults;
our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the soundness of other financial institutions with which GE
Capital does business; the adequacy of our cash flow and earnings and other conditions which may affect our ability to maintain our quarterly dividend at the current level; the level of
demand and financial performance of the major industries we serve, including, without limitation, air and rail transportation, energy generation, network television, real estate and
healthcare; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks; strategic actions, including acquisitions and dispositions and our
success in integrating acquired businesses; and numerous other matters of national, regional and global scale, including those of a political, economic, business and competitive nature.
These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-
looking statements.”
“In this document, “GE” refers to the Industrial businesses of the Company including GECS on an equity basis. “GE (ex. GECS)” and/or “Industrial” refer to GE excluding Financial Services.”
Agenda
• Why ecomagination?
• What is it?
• Our Progress
• Driving Innovation
2 / / February 2009
2. The Challenge
Global Energy Related Emissions (Gt CO2/ yr)
60
50
CO2 emissions ↓ 50%
40
2005 Decoupling needed
30
20
Technology is key
10
0
1990 2000 2010 2020 2030 2040 2050
IEA Reference Scenario
50% reduction path
3 / / February 2009
The Opportunity
Global Energy Related Emissions (Gt CO2/ yr)
60
Carbon Capture
14% & Sequestration1
50 9% Nuclear1
Renewables
40 23% & Biofuels1
2005 d
30
Energy
54% Efficiency1
20
10 1. Source: International Energy
Agency – World Energy Outlook 2008
0
1990 2000 2010 2020 2030 2040 2050
IEA Reference Scenario
50% reduction path
4 / / February 2009
3. Business Strategy
Driving Innovation and Growth of
Profitable Environmental Solutions
5 / / February 2009
1. Grow revenues to $25B
by 2010
2. Double R&D to $1.5B
3. Reduce GHG 1% absolute
by 2012
4. Reduce water 20% absolute
5. Inform & Engage public…
ongoing
Transparency & Leadership
6 / / February 2009
5. Innovative technologies…for tomorrow
$1.5B/Yr
Carbon Capture 14%
& Sequestration 14% IGCC Carbon
Capture
Nuclear 9%
Thin Film
Solar
23%
23%
Renewables
& Biofuels Advanced
Wind Desalination
d
Waste Energy
Heat OLEDs Storage
Energy 54%
Efficiency
54% Recovery
GEnx Hybrid evo
Carbon Reduction
Scenario1
1. Source: International Energy Agency – World Energy Outlook 2008
9 / / February 2009
Energy Smart Miami
• $200M smart grid initiative
• Proposal for economic stimulus funds
• Estimate for 800-1,000 “green collar” jobs
• Public/private alliance
GE
City of Miami
FPL
Cisco
Silver Spring Networks
• ~1M Customers involved
Smart Meters
Demand Management
Distribution Automation
Substation Intelligence
Distributed Generation
Enterprise Systems
“It’s time for action. With projects like Energy Smart Miami, we can
stimulate the economy today and build a brighter, cleaner tomorrow.
It’s truly a win-win for Miami and for America.” Carol Browner
Assistant to the President for Energy and Climate Change
6. Locomotives
Evolution Platform Evolution ES44C4 Hybrid Evolution
.
3,000+ Delivered Innovation: 2009 Innovation: 2010+
Up to 40% less NOx Up to 70% less NOx less NOx
3% fuel efficiency gain Up to 17% fuel savings fuel efficiency
12 cylinders / 4,400hp New AC Motor Technology Batteries = 2,000hp equivalent
11 / / February 2009
Battery Technology Manufacturing
• $100M battery technology investment
to accelerate technology deployment
• Estimate for 350 manufacturing jobs +
supply chain
• High Energy Sodium Batteries
Hybrid Locomotive - 2010
Mining – Off highway vehicles
Utilities – storage & smart grid leveling
• Compliments GE investiment in A123
Lithium ion technology
Plug-in electric passenger cars
“Hybrid locomotives, and the battery technology on bard, could be an
important part of how we ship goods by rail in the future….and further
enhance rails reputation…” Matthew K. Rose
President & CEO, Burlington Northern Santa Fee Corporation
7. 2.5MW… The next evolution
Product evolution
• 2.5 MW program initiation in 2003
• First 2.5 MW unit installed in 2004
• One million operating hours on 2.5/2.3 MW fleet
• First 2.5xl technology demonstrator installed July 2006
• First full production 2.5xl unit installed October 2007
• 2.5xl serial production commenced August 2008
13 / / February 2009
2.5MW … The next industry workhorse
Utilizing GE Technology Creating the next industry workhorse
Pitch Control Gearbox & Drivetrain
Availability & loads Reliability &
100 m
efficiency
85 m
GE 2.5 MW ‘04 ‘07
Rotor Size (m) 88 100
Reliability (%) 90 97 +7 Pts
Power Electronics
Cap Fact. (%) 39 47 +8 Pts
Blades
Increasing Grid Operability
wind capture 50/60hz Customer Value _
($MM/GW) $160MM
100m class II/III Reliability
Logistics differentiation Fleet size ~200MW ~1GW (’10)
14 / / February 2009
8. GEnx aircraft engine … entering
service in 2010
Pound for pound, GE’s most
fuel efficient and lowest
emissions jet engine
Boeing 787 vs 767:
• 30% quieter*
• 15% more fuel efficient*
and 15% lower CO2*
• 3x NOx margin to regulations
• 35% longer time on wing*
*compared to GE engine it replaces
15 / / February 2009
LEDs … Transforming Lighting
Professional Systems Replacement Lamps
Features Features
• > 40% less energy • Up to 75% less energy
• 10+ yr service life • 20,000 hr life
• RoHS compliant, no Hg • RoHs compliant, no Hg
Parking Lot & PAR20 / R63
Roadway
Features Features
• Up to 80% less energy > 80% less energy
• 50,000 hr service life • 25,000 hr life
• RoHS compliant, no Hg • RoHs compliant, no Hg
Cove Innovation A-line
16 / / February 2009
9. GE Energy Financial Services – VC / Growth Portfolio*
Energy Efficiency
& Smart Grid
Renewables
Energy Storage
Oil & Gas
Transportation
*Excludes 1 undisclosed Proof of Pilot Early Growth
investment Concept Stage Sales Stage
Development Stage
17 / / February 2009
Southwest Windpower
•World’s largest producer of small wind generators
•130,000 units
•Compact, all-inclusive wind generator (controls and inverter built in)
•Designed to provide cleaner electricity at low wind levels
•Designed for long life, with five year limited warranty
•Skystream product rated at 2.4 kW
Applications Market Projections for Small Wind
Off-Grid Applications
• Rural villages, remote homes & cabins 83% CAGR
$1,200
• Telecom towers & utility poles $1,000 Upside Case
• Island electrification $800 Base Case
($MM)
• Sailboats $600
• Water pumping 40% CAGR
$400
Grid-Tie Applications $200
• Utility-connected homes $0
• Commercial & retail 2007 2008 2009 2010 2011 2012
• Street / parking lot light retrofits
• Corporate / commercial GHG reduction Source: AWEA Small Wind Study 2007, PV Solar Growth
Reports, small wind historical sales data
18 / / February 2009