A unit of General Electric has formed a partnership with power producer AES to develop projects that reduce greenhouse gas emissions in the United States. GE is the parent company of CNBC.
GE Energy Financial Services and Arlington, Va.-based AES will try to offset 10 million metric tons of greenhouse gases annually by 2010. That reduction is the equivalent of the annual emissions of 2.2 million average cars, GE officials said.
The partnership, which comes amid growing worries about global warming, marks the entry of two major corporations into a fragmented market of companies involved in such projects, GE officials said.
"Our capital, sales channels and risk management _ along with AES's expertise in project development _ make for a powerful combination that will lead the U.S. carbon market," said Kevin Walsh, managing director and leader of renewable energy at Stamford-based GE Energy Financial Services.
The partnership comes a week after potential presidential rivals John McCain and Barack Obama joined Connecticut Sen. Joe Lieberman on a plan they say would reduce annual global-warming gases by two-thirds by mid-century.
Their plan, which is expected to produce a contentious climate control debate in the new Democratic-run Congress and draw strong opposition from the White House and industry, calls for mandatory caps on greenhouse emissions for power plants, industry and oil refineries.
The GE-AES partnership will focus primarily on reducing emissions of methane, a potent greenhouse gas with a warming potential 21 times greater than carbon dioxide.
Projects to capture and destroy methane emissions would include agricultural waste, landfills, coal mines and wastewater treatment. The partnership may also pursue development of offsets through energy efficiency projects and electricity generation from renewable sources.
"AES is committed to helping address climate change as part of our broader alternative energy strategy," said Paul Hanrahan, president and chief executive of AES. "Our partnership with GE will enhance the ability of the United States to expand energy resources while mitigating the negative environmental impacts of growth."
Through its "Ecomagination" program, GE has committed to help its customers meet their environmental challenges while reducing its own greenhouse gas emissions.
GE has pledged to more than double its investment in the development of cleaner energy technologies, from $700 million to $1.5 billion by 2010, reduce its greenhouse gas emissions one percent by 2012, reduce the intensity of its greenhouse gas emissions 30 percent by 2008, and improve the company's energy efficiency 30 percent by the end of 2012.
The partnership announcement came a day after GE, the world's largest aircraft engine maker, agreed to buy the aerospace business of Smiths Group, Britain's third-largest aerospace company, for $4.8 billion in cash.