GE

GE’s smart (and subsidized) appliances

July 26, 2009

New smart appliances from GE will do great things. They will save energy, reduce greenhouse gases, curb  demand for power on the utility grid, generate “green jobs” in America and—oh, I almost forgot—clean your clothes, wash your dishes and keep your ice cream from melting.

GE's smart best-in-class hybrid water heater

GE's smart best-in-class hybrid water heater

They will also be financed, in part, with your tax dollars, if, as seems likely, the company has its way. Incentives for manufacturers like GE that make super-efficient appliances are already part of the Waxman-Markey climate-change bill awaiting action in the U.S. Senate. As GE explained it, the government would provide “awards” to best-in-class appliances of $75 per dishwasher, $200 per refrigerator and $300 per water heater, paid directly to the manufacturers. As I read Section 214 of the bill (and I could be wrong, since it’s not easy reading), the government would also pay retailers who sell best-in-class appliances.

Did you know that the government was going to subsidize appliance manufacturers? Me neither.

Last week, GE executives came to Washington to talk with government officials and reporters about their smart appliances. When combined with a smart electricity meter, a smart grid and distributed renewable energy, GE’s water heaters, washers, dryers, dishwashers, refrigerators and stoves would help enable the company to provide zero net energy homes by 2015. That’s very cool. (Here are details from GE.)

While appliances are not the most exciting or profitable of GE’s businesses—the company tried, without success, to sell off its appliance business a couple of years ago—GE does have a history of innovation in the business. GE gave us the first self-cleaning oven, the first fully automatic clothes washer and the first refrigerator that dispensed ice and water through the door (which saves energy along with wear and tear on the biceps muscle).

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A greener–and more open–GE

July 20, 2009

General Electric and Wal-Mart are the two most important companies in America, for different reasons: GE’s reputation for management excellence means that its ideas spread widely, while Wal-Mart’s size and clout put it at the center of the consumer economy. Last week Wal-Mart announced its plans for a sustainability index, generating lots of excitement, and today GE releases a citizenship report that demonstrates that the $183-billion company is becoming not just cleaner and greener, but more open.

“We just crushed our energy consumption goals,” Bob Corcoran, GE’s vice president for corporate citizenship, told me when we talked recently about the report. “We have crushed our greenhouse gas emission goals. I feel very good about that.”

He added: “I’m sitting in a building right now” – GE’s corporate HQ in Fairfield, Connecticut – “that has solar panels on the roof.”

As you’d expect from the company that popularized the precision-driven Six Sigma approach to quality, GE’s citizenship report, its fifth, has no shortage of facts, numbers and metrics. But what struck me most about the report were the insights it offers into the changing GE culture.

GE is the No. 1 U.S. wind turbine maker

GE is the No. 1 U.S. wind turbine maker

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GE’s Healthymagination

May 7, 2009

Merely by being GE, GE commands attention. So does its CEO, Jeff Immelt, who I interviewed today in Washington after GE unveiled a new health care initiative, dubbed, inelegantly, Healthymagination. It’s a sister program to Ecomagination, which has done a lot for the image of GE since it was launched in 2005. I covered the announcement here for fortune.com.

Interviewing Immelt is no picnic. He’s a no-nonsense guy and he’s always on message. Time is limited. Today, I was accompanied by a CNN camera crew. That doesn’t help anyone to relax.

So I can’t say I gleaned any great insight from our 15-minute talk. What did come across was Immelt’s passion for GE and his belief that the company’s ability to tackle problems on a global scale is one of its key advantages. GE’s stock hasn’t done much since Immelt  became CEO in 2001 but his self-confidence appears undiminished.

Healthymagination aims to do three things—lower health care costs, make care more broadly available and improve quality. That’s a tall order. In part, it will require a shift in thinking, away from making high-quality, expensive, cutting-edge products aimed at the U.S. market and towards making lower-cost products that are good enough to do the job in the global south, where more than 2 million people lack access to basic health care. Immelt told me that GE can make money serving the poor, citing, as an example, a product called the Lullaby Warmer that keeps infants warm after they are born. It can both make healthy margins for GE and lower infant mortality rates. GE is trying to serve the bottom of the pyramid, to borrow a phrase from business thinker C.K. Prahalad.

There’s lots, lots more, including video, at GE’s sleek, new Healthymagination website. Video of my interview of Immelt should be posted Friday at fortune.com. Here’s how my story begins:

GE and its chief executive, Jeff Immelt, announced Thursday a sweeping new healthcare initiative dubbed Healthymagination that the company says will help deliver better care to more people at lower cost.

With typical hoopla – a well-attended press conference with customers and health-care experts, a live webcast, full-page newspaper ads and even a Twitter feed – GE wrapped a big marketing campaign around a business, health care, that has been part of the company for more than a century, when it began making x-ray machines.

The health care initiative is modeled on GE’s Ecomagination project, which was launched in 2005 to drive the company’s energy, environment and clean water businesse.

Like EcoMagination with its “green-is-green” mantra, Healthymagination has a catch phrase of its own. “Health means wealth,” Immelt declared. GE, he said, thinks it can make money by providing health care more broadly and at lower cost, including some of the 2 billion people who do not have access to doctors or clinics.

You can read the rest here.

So what’s next for GE? Moneymagination, to fight global poverty? Don’t bet against it.
healthymagination-ge-new-plan

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GE and AES’s big carbon play

March 8, 2009

In Hudson, a small town nestled in the scenic Appalachian foothills of western North Carolina, the county government is capturing methane, a potent greenhouse gas, from an abandoned landfill and turning it into fuel—with help from General Electric, AES Corp. and Google.

The methane-capture project is the first significant carbon offset deal to emerge from Greenhouse Gas Services, a joint venture of GE and AES, with MissionPoint Capital Partners, that has been operating under the radar since it was formed back in January 2007. Google is the venture’s first announced customer, besides a GE-branded credit card.

Now, with climate-change regulation from the Obama administration on the horizon, Greenhouse Gas Services is aiming to ramp up its business – capturing or reducing global warming pollutants. Recently, I spoke with GHGS’s CEO, Mauricio (Mo) Vargas, who says the GE-AES venture intends to be a major player in the U.S. carbon market.

New Energy Finance predicts that the regulated U.S. market will be worth $1 trillion or more by 2020. Such estimates are little more than wild guesses, but most people who understand carbon markets agree that the U.S. market will be a huge deal.

“We’re the big dogs here,” Vargas says. “Whether that’s true today, that’s not the point. That’s where we are going. We’re going to scale this up.”

“The new administration is pushing climate change legislation extremely hard,” he says.

I met Vargas (below) at AES’s corporate offices in Arlington, where the joint venture operates. AES is one of the world’s largest power companies (132 generating plants in 29 countries on five continents) and an early player—back in the early 1990s—in the carbon business. GE is, well, GE.

Vargas, who is 38, had previously worked for GE, then did a stint at AES and became CEO of the JV last March. He’s got a MBA as well as a degree in mechanical engineering.

He told me that GHGS is pursuing several types of projects, all of which capture or prevent the emissions of greenhouse gases and thereby generatecarbon credits, which the company then sells to corporate or individual customers. Its projects include methane capture from landfills, coal mines or agricultural waste; renewable energy projects that reduce emissions by replacing fossil fuels; or land or forestry management projects that increase the capture of CO2.

“We’d like to build three or four projects with each type of technology, and see how they go,” Vargas says.

Vargas was coy about identifying particular projects to which GHGS is committed, but he said they include a landfill deal in suburban Virginia and a large project to capture methane from cow manure in Minnesota. “It’s not the sexiest of businesses,” he says, referring to the cow dung project.

For now, GHGS is selling carbon credits into the voluntary offset market. Google, for example, is buying offsets in an effort to meet is goal of becoming carbon neutral. (I searched in vain on Google’s site to see if the company has met its goal.)

Buyers of voluntary offsets, like Google, are typically doing so to enhance their reputations, so they are looking for more than carbon credits. They want to be able to talk about how they offset their emissions. So building a wind farm or creating a small-scale hydro project in a poor country has more value than, say, trapping industrial gases from a factory in China.

“They want a story,” Vargas explains. “Coal mines are releasing much more methane than an agricultural project will, but they are less attractive in the voluntary market because they are related to coal.”

The real business opportunity for GHGS will come when the company can sell offsets to companies, most likely coal and oil companies, that will be regulated under cap-and-trade legislation proposed by the Obama administration. Companies that burn fossil fuels will need to either buy allowances that will permit them to emit carbon dioxide, or buy offsets from companies like GHGS.

“Our goal has always been to go into the compliance market,” Vargas says. “The voluntary market is a warm up.”

The GHGS venture is worth watching. I’m pleased that Mo Vargas will speak next month at Brainstorm Green, FORTUNE’s conference on business and the environment.

If you want to learn more about carbon finance, I can point you to a webinar that I moderated last week for the Edelman public relations firm and the Environmental Markets Association. It’s long—about 90 minutes—but it features expert commentary from Thad Heutteman of the consulting firm PEAR, Wiley Barbour of the American Carbon Registry and Mark Grundy of Edelman. You can access the webinar slides from this link.  Here is a link to the audio.

Finally, I did a podcast with Mo Vargas for The Energy Collective that should soon be available there. I’ll post a link when it goes up.

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A new green sheriff in town

February 12, 2009

Coca Cola Enterprises claims its aluminum cans contain more than 50% recycled content.

Clorox claims its Greenworks all-purpose cleaner is made with plant and mineral-based ingredients.

And GE claims its compact fluorescent lightbulbs use up to 75% less energy and last up to 10 times longer than standard bulbs.

How do we know that those claims are true?

The fact is, we don’t. My experience tells me that the risk of exposure and embarrassment is enough to deter any big brand-name company from lying about the environmental attributes of its products. But there’s lying, and then there’s telling a selective truth or merely leaving out inconvenient facts.

What we need is a reliable, independent and trusted source to analyze such claims, the way websites like Politifact separates truth from fiction in the political arena. One organization that could emerge as a standard-setter, fact-checker, product-tester and verifier has been around for more than a century—Underwriters Laboratories. These are the people who test thousands of products to make sure they meet strict safety standards. Last month, Underwriters Laboratories launched a new subsidiary called UL Environment. It’s intended to help industry and the public make sense of the “green” claims that are flooding the marketplace.

Think of UL Environment as the new green sheriff in town.

“There’s a lot of greenwashing out there,” says Marcello Manca, who is vice president and general manager of UL Environment Inc. “We want to get rid of some of the confusion.”

I spoke by phone with Marcello, who’s based in Milan, Italy. He’s an Italian who got an engineering degree from the University of Nevada, spent 13 years working in Nevada and California, and then returned home to Italy. The president of UL Environment is Steve Wenc, a Chicago native now based in Geneva. UL has 66 offices, clients in 104 countries, 127 inspection centers and it employs about 5,000 engineers, scientists, chemists and technicians. A nonprofit that oversees a group of for-profit subsidiaries. UL is paid by the manufacturers of the products it tests and certifies.

Marcello told me that UL Enviromnent initially plans to focus on two categories, building materials and consumer goods. The company intend to begin by verifying environmental claims about energy, water use and recycled content.

“One of our employees recently purchased an all-natural mattress for his newborn child because he didn’t want his son to be exposed to chemicals,” Marcello told me. But because manufacturers of products ranging from household cleansers to children’s toys are not now required to disclose their ingredients, claims like “all-natural” are hard for consumers to verify.

UL Environment also hopes to establish standards for sustainable products, working in an open and transparent manner with manufacturers, retailers and NGOs. This, too, will require the cooperation, and financial support, of manufacturers, many of whom are existing UL clients.

“We’re taking a very pragmatic approach,” Marcello says. “Our intention is not to make the world perfectly green from the outset. We know that’s Mission Impossible.”

Finally—and this gets really interesting—UL Environment would like to take a broad look at company operations. So, for example, if a product claiming to be “green” is made by a supplier in China who pollutes a nearby river or the air, UL Environment could decide that the product failed to meet its standards.

“There is a school of thought that says that you cannot build a green product unless you are a green company, too,” Marcello says.

What’s intriguing about all this is that standards are enormously important to business. Think about how the organic standard has affected the food industry. Or how the Energy Star rating has driven appliance-makers to sell more efficient dishwashers or refrigerators. Or consider the impact of the LEED building standards on the real estate industry. An array of sustainability standards has the potential to drive green business practices deep into the economy.

Of course, that makes it sound simple, and it’s not. Devising standards and getting them recognized is a long and complex process, requiring value judgments. As my friend Joel Makower is fond of asking, “How green is green enough?”

What’s more, Marcello says: “Doing it right is expensive. Doing it right takes a lot of passion.”

UL Environment will have to convince manufacturers, retailers and consumers in the midst of a global recession to invest in environmental claims verification and sustainability standards. It won’t be easy. But it will worth watching closely.

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Green dawn

January 21, 2009

Perhaps it was my imagination, but there seemed to be a spring in the step of the Americans at the World Future Energy Summit here in Abu Dhabi.

“Today, I’m pleased to say that we have new president,” said Dan Arvizu, the director of the National Renewable Energy Laboratory.

He noted that his new boss, Steve Chu, the energy secretary, is a Nobel Prize-winning physicist and he projected a bigger-than-life photo of Barack Obama onto the screen during his presentation to the international audience here.

Arvizu described, with undisguised pleasure, the economic stimulus bill before Congress, which includes $150 billion in investments in renewable and alternative energy, including $11 billion to upgrade the electricity grid.

“We are going to build a new economy based on green and renewable energy,” Arvizu said. “We need transformational change. We must seize the moment.”

Steve Fludder, the new head of ecomagination for GE, also praised the new Obama administration for its “refreshing views” and said that a key goal of the ecomagination effort at GE is to “decouple” economic growth from rising greenhouse gas emissions. GE intends to invest about $1.5 billion a year in renewable energy, energy efficiency, so-called clean coal and water purification research.

This week, GE announced that it will locate an “ecomagination technology center” in Masdar City, the new zero-carbon, zero-waste city being constructed in Abu Dhabi.

“We are seeing a tipping point around the world” when it comes to clean energy, Fludder said. “I can tell you with absolute certainty, as a technology coming, that green is profitable.”

As for the Obama administration, and its plans for an economic stimulus package, new energy policy and carbon regulation, Fludder said: “We see nothing but positive impact.”

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The climate change plan we need?

January 15, 2009

Climate change is “perhaps the most comprehensive challenge that mankind has ever faced,” declared David Crane, the CEO of NRG Energy, as a group of 26 big companies and five big environmental groups came together on Capitol Hill this morning to offer Congress a blueprint to tackle global warming.

It’s hard to argue with his assessment. The question is, is the blueprint being put forward by Big Business (GE, DuPont, Alcoa, Dow, Duke Energy, Xerox, Shell, Conoco Phillips, the three automakers, etc.) and Big Green (EDF, NRDC, the Pew Center, World Resources Institute and Nature Conservancy) up to the challenge?

The 24-page document from the U.S. Climate Action Partnership, also known as USCAP, emerged from nearly two years of negotiations. You can read it here. “We don’t view this as a perfect document,” said GE’s Jeff Immelt. “We view this as a catalyst for change.” Congress now gets to tackle the issue. Henry Waxman, who heads the House committee dealing with greenhouse gas regulation, said today he wants to get a bill out of committee by May.

USCAP is proposing a cap-and-trade scheme (as opposed to a carbon tax), which adds multiple layers of complexity to the inevitably complex issue of climate change. Far be it from me to judge whether this blueprint will do the job. But here are a few of my first impressions:

A scientific problem, a political solution: The Intergovernmental Panel on Climate Change has estimated that to have a 50% chance of preventing the worst effects of global warming (and keep warming below 2 degrees C), developed nations as a whole must cut emissions by 25-40% from 1990 by 2020 levels and 80-95% reductions by 2050. The emissions reductions targets recommended by USCAP, while not precisely comparable, fall short of that. Nevertheless, Fred Krupp of EDF said, “This gives us the certainty we need that the atmosphere will be protected.” I don’t know if he’s right, but it’s fitting that the blueprint was introduced in the Cannon House Office Building—it was clearly the product of  compromise.

The dilemma of rising energy costs: A key goal of the cap-and-trade program put forth by USCAP is to put a price on carbon emission, to provide economic incentives for companies and individuals (i.e., all of us) to cut back on use of polluting fossil fuels and make cleaner fuels more afforable by comparison. That makes perfect sense. But (and this is a big but) companies are understandably worried about the impact that higher energy prices will have on the economy, and politicians are fearful of being blamed for higher gas and electricity rates. So they want to raise energy prices—just not by too much! This is one reason why U.S. Cap calls for a massive giveaway of the permits to pollute, to avoid putting too big an immediate burden on companies or their consumers. One CEO says the hope is to create a “bearable slope” of rising energy prices. Do you thing Washington can get that right?

A victory for clean coal: I defy any layman to read the coal section of the blueprint and explain what it means. I doubt many congressmen will be able to understand it. (Here’s a sample sentence: “Require all new coal and other solid fueled facilities emitting more than 10,000 tons of CO2 per year that are initially permitted after January 1, 2015, to emit no more than 1,100 lbs of CO2 for MWh; and require all new coal and other solid fueled facilities above this size threshold that are initially permitted after January 1, 202, to emit no more than 800 lbs of CO2 per MWH–provided that USCAP’s CCS direct cash payment funding recommendations are adopted and provided further….etc etc) Trying to translate all that into English, Jim Rogers, the CEO of coal-burning Duke Energy, said that USCAP has concluded that clean coal technology is crucial to solving the problem of global warming. Not only does the U.S. have abundant supplies of coal, he noted, but so does China, whose economy is growing fast and energy hungry. So USCAP calls for massive subsidies for clean-coal plants and rapid adoption of rules to permit the capture and storage of CO2 in underground caverns. “We cannot take coal off the table,” Rogers says. “We must find ways to remove CO2 from coal use.” Good luck.

No news on nukes: Exelon, GE, NRG Energy, Siemens and other big companies in USCAP  believe that nuclear energy should be a key part of the low-carbon energy mix of the future. The enviros won’t go there. So there is a barely a word about nuclear power in the blueprint. This will be a big issue for Obama and the Congress to resolve.

Offsets, global and domestic: These are allowed in substantial numbers, to help hold down energy prices. “Offsets are an important part of the blueprint,” said Bob Lane, CEO of John Deere. The idea here is that companies that find it too expensive or technologically difficult to cut their own emissions can pay others to cut theirs. Farmers could be paid to trap methane gas given off by cows and pigs. Poor people in the developing world could be paid to preserve forests. This is controversial, but probably a good idea, provided the offsets are determined to be real, additional, measurable, enforceable and permanent–no easy feat.

The bottom line: USCAP and Congress are trying to do something that’s really, really, really hard—engineer a dramatic transformation of the U.S. company in ways that aren’t needlessly disruptive. The goal, all agree, is to move from an economy that relies on low-cost, high-carbon fossil fuels (oil and coal) to one that runs on high-cost, low-carbon fuels (wind, solar power, geothermal, and, yes, clean coal).

The politicians and CEOs want to move slowly. The science tells us to move fast. Therein lies the problem.

Jeff Immelt of GE and Jonathan Lash of WRI introduce USCAP two years ago.

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“An emotional, social, economic reset”

November 6, 2008

“This economic crisis doesn’t represent a cycle. It represents a reset,” Jeff Immelt, the CEO of General Electric, said today. “It’s an emotional, social, economic reset.”

And the biggest impact of this “reset” will be greater government involvement in the economy, and in the affairs of business, for better or worse.

“People who understand that will prosper,” Immelt said. “Those who don’t will be left behind.”

Immelt spoke to the annual conference of Business for Social Responsibility, an association of about 250 companies that are looking for more sustainable ways to do business. About 1,200 people from companies, NGOs, consulting firms, PR shops and government agencies are here for the group’s powwow in New York.

The GE chief executive didn’t put it exactly this way, but he made clear that the meltdown on Wall Street and the election of Barack Obama will bring an end to a couple of decades of nearly blind faith in free markets and deregulation. (Heck, even Alan Greenspan has admitted that.) Going forward, stronger government intervention will be a fact of life, here in the U.S. and around the world.

The question, of course, is how deep and how wide the government involvement will be. You can be sure that the Obama administration will regulate the financial industry. But will Washington bail out the automakers? Freeze foreclosures? Tax fossil fuels? Make it easier for workers to join unions? All of the above?

Adjusting to this new reality will take some doing, Immelt said. “I’m a free market guy and fundamentally a Republican,” he told BSR. (That put him in a distinct minority in this crowd, which is packed with Obama fans. A BSR survey released today found that nine in 10 of the conference participants believe Obama will have a positive impact on advancing the agenda of corporate responsibility.) But while he may be a free market guy, Immelt’s no ideologue. He acknowledged that the government has always been deeply involved in the economy; research funded by the defense department helped spur the technology revolution of the 1990s, for example. What’s more, he said, prosperity depends on what he called four “pillars” of education, energy, health care and a financial services sector that promotes innovation. Education is a government obligation, of course, and the other three sectors he cited–energy, health care and financial services–have always been heavily regulated.

Interestingly, Immelt suggested that President-elect Barack Obama make clean energy a top priority when he takes office. Energy’s a big problem, he said, but unlike, say, health care, it is a problem that can be solved relatively easily, and with substantial benefits for the economy and the environment. Not incidentally, GE, a big player in wind energy and nuclear power, and a wanna-be provider of “clean coal” plants, stands to gain from an aggressive government push for clean energy.

“Clean energy is a combination of technology and public policy,” Immelt said. “I think this is imminently solvable. It creates jobs. There’s not a lot of downside.” GE, he said, is devoting about half of its $6 billion a year in R&D investment to clean energy and clean water technologies.

Immelt also sounded a positive note about his work with the U.S. Climate Action Partnership, an alliance of GE, DuPont, Alcoa and other big companies with environmental NGOs like Environmental Defense Fund and the World Resources Institute. The GE executive is the big cahuna behind U.S. CAP, which favors mandatory regulation of greenhouse gases, a role that has taken him a long way from his days as a young GE plastics exec who had developed a “healthy dislike for environmental NGOs.” Now he’s pals with the likes of Fred Krupp of EDF and Jonathan Lash of WRI.

Having said that, Immelt made clear that neither his position on climate change, nor his belief in GE’s much-hyped EcoMagination initiative, spring from any personal love for the outdoors. “I’ve never camped,” he said. “I don’t fish.”

But the science of climate change is “pretty much irrefutable,” he said. What’s more, GE’s business of selling products that help solve environmental problems is growing, from about $5 billion when EcoMagination was launched to about $17 billion today.

Besides, big companies don’t like uncertainty and there’s an enormous amount of uncertainty right now about what a President Obama and Congress will do to regulate greenhouse gases. Even worse, Immelt noted, you could argue that the U.S. already has de facto, unspoken regulation because of the growing opposition to coal-fired power plants.

“The last 49 coal plants haven’t gotten permits,” Immelt said. “Guess what. When that happens, you do have an energy policy. You just don’t know it.”

Better to have a full-scale democratic debate about what our energy policy should be. You can be sure that when that debate unfolds next year, GE’s voice will be heard.

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When GE meets Google

September 27, 2008

Because many of us are captivated by the extraordinary goings-on in Washington, on Wall Street and in the presidential campaign, it’s easy to overlook everything else that’s happening in the world of business. But an unusual bi-coastal alliance between GE and Google caught my attention last week, and so it is the topic of my latest Sustainability column at fortune.com and cnnmoney.com.

GE and Google don’t have a lot in common, but the industrial giant and the Internet powerhouse share an interest in renewable energy. So they have come together to lobby for a so-called smart electricity grid and to collaborate, albeit in an unspecified way, in research into geothermal energy.

Here’s how the column begins:

When companies as savvy and as important as General Electric and Google join forces, it’s worth a closer look. The companies say they will work together to drive two industries with big growth potential: geothermal energy and the upgrading of the nation’s overburdened electricity grid.

The two industries are related, of course. Renewable energy, whether from wind, the sun or geothermal, which taps into the heat below the surface of the earth, won’t be deployed on a vast scale until the electricity grid can carry more power and deliver it more intelligently.

A more robust grid, often called a smart grid, would be able to move electricity in both directions (not just from central power plants to users), monitor usage better, enable more sophisticated pricing schemes and use advanced sensors to pinpoint outages.

“The smart grid is all about marrying energy technology and information technology,” said Bob Gilligan, a vice president for transmission and distribution at GE Energy, during a conference called Smart Grid this week in Washington, D.C. Without a stronger and smarter grid, the so-called clean tech revolution will come to a grinding halt.

Upgrading the grid will likely be a slog. Two famously sluggish bodies–the federal goverment and the utility industry–basically run the grid. But the geothermal play is intriguing. The potential for geothermal energy, which often gets overshadowed by solar and wind, is huge. If you want to know more, this Google website and YouTube video are worth a look.

You can read the rest of the column here.

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Green power player

June 19, 2008

Who’s the most powerful person in the world of green business?

It might be Jeff Immelt, ceo of General Electric, with its far-reaching eco-magination iniative. It might be Lee Scott, ceo of Wal-Mart, which is greening the world of consumer products. You could make an argument for John Doerr of Kleiner Perkins who with his pal and partner Al Gore aim to make Kleiner the leading venture capital firm for clean energy. Others have clout, too—Washington politicians, the leaders of the big environmental groups, pundit Tom Friedman of The Times.

But the most powerful of all might turn out to be someone whose name you probably don’t know: Sultan Ahmed Al-Jaber.

Al-Jaber is chief executive of the Abu Dhabi Future Energy Company (ADFEC), which was created by the government of Abu Dhabi to lead the Masdar Initiative. You’ve probably heard about the new city of Masdar, which is being designed and built as a zero-emissions, zero-waste, automobile-free city in Abu Dhabi. I wrote a column about Masdar city in March.

But there’s a lot more going on at Masdar than the new city, as I learned when I had a chance to sit down with Sultan—that’s his first name (he isn’t a sultan), and that’s how he wanted me to address him, so I will do so here. .

Sultan was in Washington this week to testify before Congress about clean energy, met with Masdar partners and generally spread the word about the $15 billion—yes, billion—initiative, which is moving along at a brisk clip.

Here’s what he said about Masdar City before a congressional committee:

For the first time in history, more than half of the world’s population now lives in cities, with their traditional energy inefficiencies, waste and pollution. We must fundamentally re-think how cities can conserve energy and other resources. We must heavily employ new technologies and even create new urban models, as we are doing in Masdar City.

Here are some things I learned about Sultan in our conversation: He is 34. He earned a degree in chemical engineering and an MBA from USC, after starting college in Milwaukee, Wisconsin, and then a stint at the Colorado School of Mines. (He evidently preferred the southern California sunshine.) He owns a couple of two-wheel Segway vehicles to get around. (Masdar is an investor in Segway.) And he is really excited about marshalling the money, the will, the brainpower and the commitment of the leaders of Abu Dhabi to drive the global adoption of clean energy.

“I don’t want to sound arrogant,” Sultan told me, “but the truth is, we are creating history. We’re very passionate about it.”

He said the Masdar initiative has four broad goals—to diversify the Abu Dhabi economy which now depends heavily on oil and gas, to turn Abu Dhabi into an exporter of technology and knowledge (which it now mostly imports), to develop the human capital in the emirate and to maintain leadership in what he called the “post-fossil fuel era” (his phrase, not mine).

The city is the centerpiece of the effort, but just as important is the university that Masdar is developing in cooperation with MIT. It will be open only to graduate students, who will have to meet MIT admission standards. They won’t have to pay tuition. They’ll also have the chance to test out their ideas and technology in the new city. Presumably, the best ideas can get funded by ADFEC.

“Masdar City is not a real estate play,” Sultan said. “It has much more to offer. It is beiong modeled after Silicon Valley.”

Besides the city and the university, Masdar has a $250 million venture capital fund that has made investments in other VC funds as well as direct investments in clean technology startups. (Here’s the portfolio.) Other investors in the fund include Credit Suisse and Siemens.

Last month, Masdar said it will invest up to $2 billion to build its own own thin-film solar company. The first plant will be constructed in Germany because demand for solar panels is robust in Europe; then a copycat plant will be built in Abu Dhabi, the first solar-energy manufacturing plant in the Persian Gulf. A third plant may be built in the U.S. Applied Materials of Santa Clara, Ca., will supply the equipment

Other companies working on projects with Masdar include GE, which is developing wind power in Masdar, and British Petroleum and Rio Tinto, which are working on a hydrogen power plant. Masdar has also created what it calls the Zayed Future Energy Prize, with an annual prize pool of $2.3 million, to reward achievements in energy innovation. The first winner will be announced in 2009.

Sitting in Washington, discussing all this with Sultan, I was struck by the fact that, when it comes to energy, Abu Dhabi has a clearer sense of where it wants to go and how it wants to get there than either the Bush administration or the Congress. Of course, it’s easier to develop a coherent policy and to get things done in a tiny, wealthy nation governed by a royal family with a strong sense of purpose.

As Sultan put it: “Either we can be leaders or we can be followers. We want to lead the way. And the time for action is now.”

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