The company, which is backed by GE’s balance sheet, brings together GE’s LED, solar, energy storage and electric vehicle businesses as a one-stop shop for early customers like Walgreens, JPMorgan Chase, and Hilton Worldwide among others.
Current reflects GE’s shift toward new business models that address customers’ end goals. Instead of selling separate energy products, Current will combine power offerings as a service and reduce cost for companies by simplifying energy and providing improved efficiency. It will use GE’s Predix software platform to collect data and help customers understand how they’re using, and losing, energy.
The goal is to cut waste for customers who, for example, power millions of square feet of factory space, commercial office space or retail operations. The services are projected to save customers 10-20% on their energy bills and also help utilities manage demand on the grid.
“Commercial enterprises can’t afford complexity and inefficiency in energy solutions if they are to remain competitive”, says Beth Comstock, a vice chair of GE who oversees Business Innovation. “They are looking for ‘future proofed’ solutions. From the socket to the grid, we understand how the electrons flow and have the unique position to optimise energy regardless of the scenario or customer”.
The new company, which begins life with $1 billion in revenue and will be headed by Maryrose Sylvester, the president and CEO of GE Lighting. GE is known as the inventor of the light bulb and it’s lighting division therefore, has always drawn special attention. The inclusion of LED lighting in Current’s portfolio will bring extra pressure.
Lighting is undergoing a rapid transformation as Light Emitting Diodes (LEDs) become the number one source of light in buildings. This is the single most important driver for the growth of Bus-based lighting controls and their convergence with IT Networks and integration into the Building Internet of Things (BIoT), according to a recent report from Memoori: The Lighting Controls Business 2015 to 2020.
GE Current’s holistic approach to building energy management matches this trend, and the global commercial lighting controls market alone is expected to reach $3.67 billion by 2020.
Memoori’s report identifies a marked decline in M&A activity in the lighting sector 2013 and 2014, both in terms of value and the number of deals struck. However, 2015 has already seen a significant increase in value with a reported total of $3,435 million involved, primarily due to the recent divestment at Philips. Now GE’s creation of Current reinforces that industry trend.
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GE previously invested millions into solar energy, only to sell those assets to First Solar when it decided that getting into utility scale solar power wasn't in its best interest. While GE can disrupt the energy space by bringing a full suite of energy solutions to customers, it's not certain that GE will remain invested in this business long enough to see fruit from this potential. Talk is cheap in renewable energy and efficiency, so we'll see what GE actually does.
GE has the potential to be a disruptive force in energy and without some of the conflicts that have made disruptive businesses tough for traditional energy companies (utilities as well as oil and gas) to house. The company doesn't own fossil fuel assets, it just builds them, and its big interest is expanding its reach in energy, not undercutting other parts of its business like a fossil fuel utility might do with renewables.
In fact, it may be a necessity for GE to play a bigger role in these new technologies if the growth in wind and solar means less demand for fossil fuel or nuclear generators in the future. At the very least, this is an energy behemoth to watch in the future and one that could play a bigger than expected role in paving the path to a renewable energy, smart building future.