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Green is a Business Opportunity 2008 Business Future of America's Conference Lorraine Bolsinger June 27, 2008

Green is a Business Opportunity 2008 Business Future of America's Conference Lorraine Bolsinger June 27, 2008. 2006. 2030. Challenges & Opportunities…. Gross Domestic Product. Resource Scarcity 1B+ water… grows to 5B+ Raw material inflation. Energy Security + Cost

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Green is a Business Opportunity 2008 Business Future of America's Conference Lorraine Bolsinger June 27, 2008

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  1. Green is a Business Opportunity 2008 Business Future of America's Conference Lorraine Bolsinger June 27, 2008

  2. 2006 2030 Challenges & Opportunities… Gross Domestic Product Resource Scarcity 1B+ water…grows to 5B+ Raw material inflation Energy Security + Cost Increasing demand…fossil fuels under pressure Flat world…wealth disparity Regulation Near consensus on climate change… legislation nearly certain G7 Countries E7 Countries

  3. Impacting Our Customers…B2B Operations - Resource Costs Human Resources - Employee Attitudes Demand Growth EHS, Gov’t. Relations - Regulations Communications - Public Opinion Resource Constraints R&D, Marketing - Market Demand Strategy, Finance - Risk & Uncertainty Every function involved

  4. Global Recognition

  5. 2.0 1.5 1.0 0.5 1980 1990 2000 1980 1990 2000 GDP…CO2 USA EU Japan 2.0 1.5 1.0 0.5 Indexed Growth India FSU China 1980 1990 2000 2005 per-capita GDP CO2 emissions How do we de-couple? Modified Source: Raupach, Michael R. et al. (2007) Proc. Natl. Acad. Sci. USA 104, 10288-10293

  6. CO2 legislation/”carbon cost” inevitable Global tons carbon/yr (billions) • 7 “wedges” required • 16 “wedges” identified • GE plays big in 12 of 16 } 14 = 1B tons of carbon/year 1 Projected growth Historical 7 0 2005 2055 Source: Princeton Univ.

  7. …GE’s big plays Low carbon power Efficiency Low carbon fuels CO2 Capture Renewables Buildings BP H2 Joint Venture Synfuels Technology Wind Turbines Solar Power Biogas Engines Energy Finance Water Treatment Appliances Lighting Biomass Energy Finance Water Treatment Transport Natural Gas Aircraft Engines Locomotives Large-Frame Turbines LM Turbines Fuel Cell H2 Base Load Coal Plants Forests & agriculture Energy Services Water Treatment IGCC Cleaner Coal ESBWR Nuclear Broad participation in “carbon management”

  8. ecomagination…a business strategy • Grow revenues to $20B • Double R&D to $1.5B • Reduce GHG • Inform public

  9. Revenue…$20B by 2010 $25B Revenues ($B) • Eco products in every business • Cross-business offerings • Green hospital • Eco homes • Waste water-to-value 23 21 $20B Rev by ’09 +20% CAGR 17 14 11 9 '05 '06 '07 '08 '09 '10

  10. R&D…$1.5B by ‘10 R&D Investment ($B) • >$1B “clean tech” fund • Product portfolio • ’05-’07 17 60 • Future Technologies • CO2 capture • Zero liquid discharge • Alternative fuels • Waste to Energy • Demand Side Mgt 1.5 1.4 1.2 1.1 0.9 0.7

  11. Lower Emissions & Energy • Beating all emissions & energy targets • 700 kT CO2 reduced • (-8%) from ‘04 • $100 MM ’07 energy savings • Engaged teams • Lean, “Treasure Hunts” & GE solutions C&I Biomass Waste Heat Recovery Gas engine waste heat Biomass heat Compressor waste heat Out of service blds. Hungary Jenbacher Gas Engine

  12. Outreach…public policy influence Legislation Advocacy EU Korea Middle East Thought-Leadership Friedman Schwarzenegger

  13. Outreach…PR impact Press Award-winning ads Website

  14. Time to step-up…5th goal • Adding a fifth goal…20% water use reduction ’06-’12 • Highlight the growing issue and opportunities for savings • Influence potential industry standards • Showcase our customers & GE sites

  15. Business impact … Brand Reputation Scale Revenue ($millions) Rank Company 172 Avnet 14,254 173 ConAgra Foods 14,172 174 Fluor 14,079 176 Chubb 14,003 177 Enterprise GP Holdings 13,991 178 Qwest Communications 13,923

  16. Green is a Business Opportunity Global Carbon Markets US Crude Oil Spot Price Alternative Energy Venture Investment Green Buildings US Green-Inclined Consumers Hybrid Vehicle Sales From energy to real estate, businesses are facing the very real opportunities and challenges of climate change and the environment

  17. Residential Products: GE point-of-use and point-of-entry filtration systems are enabling homeowners to produce higher quality water from every tap in the home. This same technology is helping developing countries to leapfrog traditional, costly infrastructure and provide safe water to those who need it most. Product Water: Consumers use the products they trust – whether it is pharmaceuticals, food, or beverages. As brands expand globally, GE technologies ensure high quality ingredient water for manufacturing regardless of a plant’s location or its water source. Desalination Solutions: Drawing on the ocean’s virtually limitless water resources, GE’s desalination technologies are helping water scarce regions to create new freshwater sources that can quench growing demand. Municipal Solutions: Facing unprecedented growth and water demand, cities are turning to GE’s advanced membrane and water quality measurement technologies to tackle increasingly stringent water and wastewater regulations and the threat of new, virulent pathogens in our lakes and rivers. Utility Solutions: GE is optimizing system efficiency & increasing uptime in cooling towers and boilers by reducing energy usage and greenhouse gas emissions. Advanced monitoring systems reduce the risk of pathogen growth, such as Legionella, in cooling systems. Process Chemicals & Separations: Silently working in pipes, tanks and process fluids, GE’s advanced chemicals protect valuable production assets from corrosion and fouling faced in day-to-day operations, while improving overall manufacturing efficiency and quality. Industrial Wastewater: Once considered a by-product, GE’s water reuse technology is transforming industrial wastewater into a sustainable, new water source that can often be used many times over—dramatically reducing the strain on our precious water resources. Water…portfolio approach Desalination Solutions Product Water Residential Products Municipal Solutions Utility Solutions Industrial Wastewater Process Chemicals & Separations

  18. Water…creating new sources “1 Billion people are impacted by water scarcity today…5+ Billion by 2025” • Sulaibiya plant in Kuwait City • Water produced for irrigation • Frees up fresh water for human consumption • 375,000 cubic meters/day • World’s largest membrane based wastewater filtration project

  19. Water…helping industry Beverage Manufacturing • GE installed 28 systems that recover 50-70% of reject/brine • Customers include: • 28 systems recover more than 750 million gallons per year • Cadbury-Schweppes • Niagara Water • Nestle • Coca-Cola • Nor-Cal Beverage • Pepsico

  20. Energy…diverse portfolio to meet any outcome Gas Wind Nuclear Solar T&D Biomass Cleaner Coal Environmental Services Asset Optimization

  21. Wind Products Industry installation forecast (GWs) ~32 1.5 MW platform ROW 2% Asia Pacific32% 2.5 MW platform North America 29% 15.0 7.8 Europe 37% 3.6 MW offshore ~$6B+ in ‘08 ‘03 ’09E ‘06 Source: BTM Consult, March ‘08

  22. Wind … most economic large scale renewable Cost of Electricity nearing mainstream Cost of Electricity (¢/kWh) 20 year levelized 20 ~30+ US ¢ per kWhr 15 ~10 ~8 ~7.5 ~8.0 ~6 Coal Nuclear Wind Biomass Solar Gas 10 Basis: $8.00/MMBtu NG • Fixed cost of electricity • Energy security • Zero air emissions 5 ‘85 ‘95 ‘05 GE Company Proprietary

  23. Solar Solar America initiative Research & development key Cost-shared, three-year cooperative agreement with the U.S. Department of Energy Today Integrated systems On and off-grid applications Tomorrow • Optimize • Material science • Increase efficiency • Value chain Technology driving cost of electricity Thin film investment Minority equity interest in emerging thin film company, PrimeStar Solar, Inc. And beyond • Breakthrough technology • Thin film • Nano scale materials

  24. Biomass Bio power growth Global installed capacity (GW) 16 Asia & rest of world Efficiency, reliability & fuel flexibility • 0.25MW to 4MW • 8,000 units installed • 2,600 biogas, landfill & sewage gas Europe 3.5 U.S. '02 '20 Source: Frost&Sullivan Gas engines (Unit volume) 1200 480 ‘03 ‘07

  25. Fuel options Keeping costs down by using readily available resources … diversity of supply and increasing efficiency Synthetic & industrial lower caloric value Biofuels Biodiesel and ethanol Fossil fuels natural gas and oils Flexibility in aviation, marine, gas engines, turbines and locomotive

  26. Energy…cleaner, greener steel • Jenbacher Gas Engines • Utilize waste gases for cogen • Maximize CO2 fuel efficiency • Blast Furnace Gas • Frame 9E gas turbine…fuel flexibility • Reduce 2MM tons CO2 • 2.4B kWh of electricity/year • 160 tons of steam/year

  27. Cleaner energy…greener steel…in the news The market value of these carbon credits is estimated at 150 million euros. Fulvio Conti, Enel CEO, said the company purchased the credits at about 8 euros per ton … The reduction of CO2 emission will be achieved through five energy-efficient projects, including combined cycle power plant, in which the waste heat is used to generate additional electricity, thus enhancing the efficiency of electricity generation.

  28. Waste to Value Brewery Example • Solution • Recycled wastewater: conserves fresh water intake and reduces disposal costs • Biogas generation: reduces electricity and natural gas expenses • Renewable credits: derived from clean power and recycled water • Potential Impact • Recovered water : >94% • CO2 reduction : 13,000 tons/yr • Biogas generation : 400 kW • Anticipated Payback : 3-4 Years ZeeWeed Membrane Bioreactor Jenbacher Bio-gas Engine +

  29. Germany: $120/ton ~77k t/d US Overall: $35/ton Japan: >600k t/d $250/ton ~120k t/d US Northeast: Korea: $71/ton $350/ton >110k t/d 80k t/d India: >500k t/d’ Gasification…cleaner trash Market • 2.3MM tons/day of MSW worldwide, growing to 5.1MM tons/day by 2020 • $125B market needs alternatives to landfill and incineration • Large GHG/CO2 market opportunity Process • High Temperature Gasification (1500C) • 250:1 volume reduction • Syn Gas converts to : chemical feedstock, liquid fuels, or electricity • Energy positive 900 kWh/ton, ~15-20% electricity need High Energy Electrical Plasma Breaks Down Hydrocarbons into Fundamental Constituents Recycled Metals from Gasifier Vitrified Slag – Unrestricted Use

  30. Financial services Verification • Carbon management • GE AES Greenhouse Gas Services • Global market ~ $1-5B by ’12 $3+ Billion Renewable Energy Portfolio • Projects • $6B by ’10 Geothermal 2% Solar 6% Biomass 5% Venture Capital 1% Hydro 6% Wind 80% 7000+ MW Market Segment Diversity Oil & Gas Technology (5%) • Energy Tech Equity • Diverse technologies, sectors, geography • A step toward partnership Energy Efficiency (11%) Smart Grid Technologies (8%) Battery Technologies/ Energy Storage (30%) Renewable Energy (46%)

  31. Customer collaborations

  32. Green is a Business Imperative “Any company that develops technologies based on a lower carbon footprint and on the more-efficient use of scarce resources will have greater access to and acceptability in the markets that will develop across the world” Dr. Rajendra Pachauri Chairman, IGPCC & 2007 Nobel Peace Prize recipient

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