GE: Gas is Cheap and We’re Investing in the HUGE Bull Market
General Electric (NYSE:GE) is making acquisitions and investing in new products to profit from the use of gas (NYSE:UGA) as fuel for power generation, in part as a back-up to energies such as wind and solar power (NYSE:TAN). GE vice-chairman John Krenicki said the company was “looking at a 25-year, very bullish market” for gas. Gas’s good fit with renewable energies (NYSE:PBW), its relatively low carbon dioxide emissions rate compared to coal, and the availability of cheap supplies in the U.S. are all reasons why GE is “betting on gas in a big way, investing ahead of the curve,” according to Krenicki.
GE has spent $500 million on research and development for a new gas turbine they launch Wednesday in Paris. The turbine will be manufactured in France (NYSE:EWQ) and distributed throughout the European Union, where governments have set a goal to have renewable sources provide 20% of the EU’s power by the year 2020.
Tuesday, the International Energy Agency published a report citing possible challenges in maintaining a stable power supply on the turbine grid. Hind Farag, an analyst at Wood Mackenzie consulting agency, said that, “Gas is better able to follow demand; the wind does not always blow when demand is higher.” Iberdrola (PINK:ISBDRY), the leading developer of wind farms in the U.S., says that cheap gas is in competition with wind projects, and could be jeopardizing the future of wind energy (NYSE:FAN).