First published on the Cleantech Investor website, July 2010

A US$200m innovation experiment

By Denis Gross

The’ Innovating the Future Now’ event was hosted by GE at its Global Research Europe Centre, Garching (near Munich), Germany on 15 July. At the event, GE introduced its US$200m “GE ecomagination Challenge: Powering the Grid”.

The Challenge underscores GE’s commitment to accelerate smart grid technology through open collaboration and public private partnership. Nani Beccalli, President and CEO of GE International said that the Challenge was:

“looking for the best ideas that will help create smarter, cleaner, more efficient electric grids, and accelerate the adoption of smart grid technologies. The global  challenge invites researchers, entrepreneurs and start-ups to share their best ideas and come together to take on one of the world's toughest challenges – making the grids smarter to meet society’s needs and cope with today’s energy challenges.”

The GE ecomagination Challenge is arguably the largest ever of its kind and is open now for submissions at www.ecomagination.com/challenge

The Challenge has been launched in collaboration with leading venture capital firms Emerald Technology Ventures, Foundation Capital, Kleiner Perkins Caufield & Byer and RockPort Capital, and Science|Business. It forms part of the broader GE ecomagination initiative, the company’s global commitment to build innovative clean energy technologies and will help fund the most promising ideas.

Proposals must be submitted on-line by 30 September 2010. Proposals are sought in three, broad categories:

- Renewables
- Grid and Eco Homes
- Eco Buildings

Select Challenge entrants will be offered the opportunity to develop a commercial relationship with GE through: 


Investment:

The $200 million capital pledge of GE and its partners will be invested globally into promising start-ups and ideas

Validation:

Evaluation of entrant’s business strategy through in-depth discussions with GE‘stechnical and commercial teams

Distribution:

Exploration of partnership opportunities with GE to scale a business and create global reach

Development:

Leveraging of GE‘s technical infrastructure and GE Global Research Centers to accelerate technology and product development

Growth:

Exploration of opportunities for utilizing existing GE customer relationships for go-to-market strategy

The GE ecomagination initiative is aimed at driving a global energy transformation with a focus on innovation and R&D investment to accelerate the development and deployment of clean energy technology. Since its inception in 2005, more than 90 ecomagination-approved products have been brought to market with revenues reaching $18 billion in 2009.

Despite initial misgivings of GE and the industry, the ecomagination initiative can point to significant achievements. In the five years since it was launched GE has doubled R&D expenditures in cleantech to US$5bn; revenues from the ecomagination brand have grown by 400%, from US $5 billion to US $20 billion; GE has reduced its own emissions by 22%; and GE has saved US$130m in energy, water and other resource costs.

Thanks to the success of the first five years, GE has outlined ambitious goals for the period from 2010 to 2015:

- To double R&D expenditure in cleantech to US$10bn
- To reduce GE’s energy intensity by 50%, and to further reduce GE’s global consumption of water by 25%
- To launch 30 new ecomagination products in 2010 and 30 new products in 2011

The importance of innovation was highlighted throughout the event in Europe. The role of innovation was borne out by research, undertaken by the consultancy Strategy One, and discussed in Munich. The event also included a stimulating panel discussion highlighting the importance of bringing an invention to market – and why this is an area of relative weakness in Europe. As Nani Beccalli expressed it:

“low carbon innovation will only become a reality with the public and private sectors working together. My belief is that innovation will drive the next stage of growth and development in Europe and that we can, with the right conditions, remain a leading hub in low carbon innovation”.

Cleantech Investor will aim to report going forward on the response to the challenge, particularly with regard to the European companies.