NATIONAL HARBOR, Md.--The demand for energy products is gravitating toward the developing world and the bulk of new clean-energy business risks going along with it, said General Electric CEO Jeffrey Immelt.
Immelt gave a talk at the ARPA-E Summit here on Tuesday where he focused on the importance of energy in the context of global economic competitiveness. The conference, meant to showcase disruptive energy technologies, has attracted energy technology entrepreneurs, investors, and policymakers.
The U.S. is historically been strong in developing new technologies, but uncertain policies and relatively low levels of spending on research and development make the forecast murky, Immelt said.
"Unless we have a broad perspective on job creation, innovation, and technology growth, we are going to fall behind as a country," he said. "We need growth as a country and globally we play in a much more competitive arena than any other time in our lifetimes."
Given today's trends, the demand for energy-related products will expand much faster in Asian countries than in the U.S. or Europe, he said. For example, by 2020, the number of passenger cars sold in China and India will be more than twice the number sold in the U.S. The auto industry in those two countries will consume all of the oil output of Saudi Arabia by then, he said.
Having strong local demand will naturally pull businesses to those countries because "innovation and supply chain strength gets developed where the demand is the greatest," Immelt said.
In terms of policy, Immelt said China is "linearly focused on energy" with policies aimed at job creation. By contrast, the policy picture in the U.S. is uncertain in regards to renewable energy mandates or regulations to cut carbon regulations.
The formula for developing clean-energy businesses is to match technical innovations with large-scale deployments, Immelt said.
"Nobody in this room should get at all complacent about where we are. We all need to get to work if we want a productive country in this space. We can address energy security, job creation, and reduction of global warming all at the same time. Technology is the answer, but we can't stand still," he said.
During questions, Immelt said investing in a larger and smarter grid would lead to a burst in technical innovation and more customer involvement in the energy market. That shift would require federal government oversight over the entire grid, rather than the states, and tens of billions of dollars, a scenario that Immelt admitted was unlikely to happen.
As a reflection of the complexity of policy questions, Immelt said Europe will lead the offshore wind market in the next 10 years because wind developers will have a guaranteed rate for the electricity these farms produce, a policy called a feed-in tariff. But he stopped short of endorsing feed-in tariffs.
"Electricity bills in Europe will be higher but more jobs will be created. I don't know which is better--that's the discussion," he said.