GE tackles water supply

Fairfield, Conn.-based General Electric (NYSE: GE) has already made significant investments in cleantech through its ecomagination initiative, but now it's putting the focus on water.

The company released a water reuse white paper today that identifies four major policies to increase recycling and reuse — education and outreach; removing barriers; incentives; and mandates and regulation.

"Right now water is such a local issue," Jeff Fulgham, chief marketing officer for GE Water & Process Technologies, told the Cleantech Group.

In the U.S., he pointed out the challenges in the drought-stricken Southeast, including Atlanta, as well as a battle going on around the Chattahoochee river between Georgia, Alabama and Florida, all fighting over water rights.

"What we're trying to do is raise the view not to be a local city, a local area, but a holistic approach to how do you solve this problem."

The problem of water scarcity isn't confined to the States, with severe water shortages occurring in other developed countries like Australia, as well as in emerging markets.

"We see huge need in the north of China," said Fulgham. "Tremendous natural resources — coal and ores and all in the north of China — but terrible water supply."

He said 90 percent of the rivers in the area won't support marine life.

"So it's a situation where, if you're going to set up a manufacturing operation there, it's not an option — you've got to have a pretty darn pro-active water sustainability approach."

But there have been problems in getting foreign investment in water in China, with speakers at a recent conference in Beijing noting the confusing array of private-public partnership models currently being experimented with in the country (see The Wild West of water in China).

GE announced its new water initiatives in Beijing and said it's working with China's Baosteel Group to help that company meet water efficiency goals.

Check out a GE water purification plant in Beijing here >>

GE is also turning some of that efficiency approach on itself, announcing a plan today to reduce its company-wide water use by 20 percent by 2012.

The diversified conglomerate said that target is expected to save 2 billion gallons of fresh water, enough to fill more than 3,000 Olympic-sized swimming pools. In 2006, the company said it used approximately 10 billion gallons of fresh water.

GE isn't the only company predicting a boom in water services, with three water companies making the move to public markets this year.

Earlier this month, Global Water Resources, a Phoenix, Ariz.-based water and wastewater utility, filed to raise up to $50 million in an initial public offering (see Global Water Resources going public).

Global Water joined Voorhees, N.J.-based American Water Works (NYSE: AWK) and San Leandro, Calif.'s Energy Recovery in the leap to go public (see Cleantech water deals diving into rough market).

American Water, which started trading last month, didn't fare as well as expected, pulling in $1.25 billion after pricing 58 million shares at $21.50 per share (see American Water Works prices below range).

The company had originally planned to offer 64 million shares at $24 to $26 per share.

"The water market in general is a tremendous opportunity for investment and consolidation. It's a $400 billion space and the biggest players are less than $10 billion," said Fulgham.

GE plans to use a wide range of solutions for its own water reductions, as well as for its customers, with the bulk of the cuts coming from applying process efficiencies and reusing highly treated wastewater.

The reused water could be used for boiler feed, cooling tower make-up, heat exchangers and manufacturing processes.

GE's water efficiency efforts fall under the company's ecomagination initiative, with revenues from the company's portfolio of energy efficient and environmentally friendly products and services crossing $14 billion in 2007, up more than 15 percent from 2006.

The company has boosted its ecomagination revenue target to $25 billion by 2010. GE set an original goal in 2005 to grow revenues from cleantech products from $6 billion in 2004 to $20 billion in 2010, but today said it expects to cross the $20 billion mark a year early, in 2009.

More growth is on the way in water, according to Fulgham.

"I see two big levers being technology advancement and policy to help push us along. If we can get both of those things aligned, it's a new game."