General Electric powers up its energy game

'We are focused on this decade while keeping a path toward zero'

General Electric Co. is ramping up its efforts in the energy space. 

It's moving ahead to decarbonize the power sector while helping 700 million around the world without adequate energy to meet their needs.

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GEGENERAL ELECTRIC CO.12.54-0.22-1.72%

The Boston-based conglomerate will employ an accelerated and strategic deployment of renewables and gas power as it strives to help fight climate change, according to a white paper released Tuesday.

The focus on natural gas and renewables at the company comes as former Vice President Joe Biden draws closer to the presidency after the Electoral College on Monday certified the 2020 election.

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Biden has said Rep. Alexandria Ocasio-Cortez’s Green New Deal, which calls on the U.S. reaching net-zero carbon emissions by 2050, is a “framework” for his energy policy.

“We are focused on this decade while keeping a path toward zero,” Scott Strazik, CEO of GE Gas Power told FOX Business.

A third of the world’s energy is currently produced by coal, which generates about 70% of the power sector’s emissions.

Natural gas, meanwhile, is two-thirds less carbon-intensive than coal and will help General Electric on the path towards zero emissions. Gas supplies are expected to increase by 80% between now and 2040.

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On the other side, about $200 billion per year gets spent on wind and solar energy each year, but that only accounts for 8% to 9% of the world’s power. Every $200 billion that is spent contributes just one point to power generation.

Gas plus renewables is the “most effective way to drive action today to have a positive impact on decarbonization and climate change,” said General Electric Chief Technology Officer Vic Abate.

The shift in direction for GE’s power business comes as the company is in the midst of restructuring its business under CEO Larry Culp, who took over in October 2018 – just weeks after the unit announced a $23 billion writedown.

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The restructuring plan has included more than $9 billion of deleveraging, reducing debt at GE Capital by more than $1 billion, stabilizing its power business and announcing plans to freeze pensions beginning in January 2021 aimed at reducing up to $8 billion of debt tied to the program.

A reduction of headcount at General Electric’s power business is included in the restructuring and will help the unit reach a “more stable state,” according to Strazik.

“A lot of what we're focused on just continues to drive investment and focus on the first principles of electricity growth, need to decarbonize, need to do more this decade,” he added. “If we're going to do more this decade it’s going to include investments in both renewables and gas, which by default as this plays out will include investments in people and smart ways.”

GE shares are little changed this year, down 3% compared to the 13% gain in the S&P 500.