Friday, February 6, 2009

What does $5.2 million and 1 minute get you: A preview of our energy future.

Somewhere in between the 59 year-old “Boss” sliding across stage and one of the most exciting endings in Super Bowl history were two energy-related commercials that hopefully did not go unnoticed by the general public. The commercials I am referring to were two new additions to General Electric's (GE)ongoing “Ecoimagination” campaign (you can view all of the ecoimagination commercials here), which is now being enveloped in their “Now” campaign to promote innovate ideas in healthcare, energy and the environment, and global research. The “Scarecrow”ad depicts the Wizard of Oz character dancing around power lines and power grids to the tune of “If I Only Had a Brain.” This clever ad intends to reflect how “smart grid” technologies will intelligently improve our aging electric power system by enabling advanced digital technologies to dramatically increase the efficiency of the electric grid. In a nutshell, the “smart grid” system is intended to optimize current electric transmission and distribution while opening up new markets for distributed power generation sources and alternative sources of energy such as wind and solar. Such a system would use two-way communications devices, advanced sensors, and distributed computing technology to improve the reliability and efficiency of power systems. This idea has generated such strong response of late that Obama’s proposed stimulus plan includes $11 billion towards investing in smart grid technology. The second commercial that GE broadcasts provides a funny spin on the potential of wind energy, even in its most simple application.

As an “energy junkie” and a “sports junkie” I was a thrilled to see my two greatest interests converge before a mass audience. Finally, the most pressing energy issues had made the "big time" and one of the "big-timers" in the industry was leading the charge (GE is the 12 largest corporation in the World in terms of annual revenues according to the Fortune 500). This got me to thinking about what this meant for the future of the energy industry and the advancement of new energy technologies. Here we have one of the biggest players in conventional energy technologies spending large sums of money in advertising (a 30 second commercial costs $2.6 million, although the cost for GE was actually an opportunity cost since they own NBC who broadcast the Super Bowl) to promote new energy technologies that could essentially replace its old technologies. This demonstrates that the new “green economy” that will promote more efficient energy use and cleaner energy sources need not be seen as a threat to companies with huge stakes in the energy industry, but rather as an opportunity. GE is not the only major energy player to jump on new technologies. Major oil companies such as BP have also been some of the biggest investors in renewable energy technologies. This makes simple business sense. These companies already understand the energy business, they only need to adapt their business model to new ways of making money in a new energy economy. But not all, or even many, of the major energy companies are jumping on board the renewable energy bandwagon. As oil and gas companies continue to reap huge profits, the industry's short-term business model just doesn't see the need. This is a shame, because these industries have some of the biggest research and development budgets in the world. It may take a gas tax or some form of carbon regulation to change the focus of major energy companies, but when it happens energy companies can already be prepared to shift to new business opportunities. The opportunities are out there, and companies can follow GE’s lead on developing and promoting these new energy technologies.

No comments: