Sept. 29 (Bloomberg) -- General Electric Co. expects its energy unit’s sales in China will climb by at least 25 percent annually as the most populous nation adopts more fuel-efficient technology, Chief Executive Officer Jeffrey Immelt said.
GE has “great aspirations” in China, Immelt said at a briefing in Beijing yesterday. Immelt was in Beijing to announce a China-based contest offering $100 million in seed money for innovations in gas-based power technology.
GE Energy Infrastructure, whose equipment provides more than a quarter of the world’s electricity, last week projected about $60 billion in revenue in 2014 as use of natural gas and alternative sources like wind, solar and biogas rise along with global demand, including in emerging markets like China.
“China is a key part of our energy strategy,” Immelt said. “What you are going to see here is China wants what most other countries want, which is fuel diversity, energy security, pollution reduction and conservation.”
GE has said it’s targeting profit growth of 10 percent next year in its energy division. Earnings this year should be about $7 billion, compared with last year’s $7.3 billion. Orders for gas power projects are rising and prices for renewable sources like wind, biogas and solar are stabilizing, GE has said.
The contest announced yesterday is part of the Fairfield, Connecticut-based company’s “ecomagination” initiative, which includes a $200 million fund that has put up financing for 22 small companies and entrepreneurs working on renewable technologies, including so-called smart-grid projects.
GE’s ventures in China include three partners tied to energy: State Grid Corp. of China, Shenhua Group Corp. and Harbin Power Equipment Co. The company announced projects in January totaling $2.1 billion.
“What China brings is scale,” Immelt said. “Small ideas become big applications very quickly in this country. I expect new gas innovations done in scale within the next three to five years. That’s going to happen here.”
--Edmond Lococo, Rachel Layne. Editors: Suresh Seshadri, Joshua Fellman
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