The world will need 70 percent more electricity by 2035. Utilities will have to invest over $1 trillion to keep up with the demand.
Not so long ago, politicians and economists talked about running out of oil and feared energy shocks lurking in the near future. But today, many experts are taking a closer look at electricity. Large parts of Asia and Africa are booming and need power to grow. U.S. and Europe have power but run an aging grid that Thomas Edison would recognize. Experts estimate that the global electricity demand will grow by 70 percent by 2035 and that the U.S. and China will each need to invest more than $600 billion in their grids and power infrastructure in the very near future. What is to be done?
The good news is that this is largely an engineering challenge. The technology to upgrade the grid exists. GE, for example, just partnered with China’s XD Electric to develop and distribute high-voltage equipment that can help automate the grid, efficiently move power from producers to consumers over long distances, and upgrade simpler legacy systems to more agile and responsive grids. “XD is a proven industry leader, helping to create the world’s most advanced electric grid in China with the highest quality high voltage equipment in the world,” says Robert Turko, general manager for power delivery, GE’s Digital Energy business. “Together, GE and XD have complementary offerings that pair XD’s high-voltage equipment with GE’s grid automation capabilities.”
The new partnership includes a joint venture that will offer Chinese customers GE’s grid automation products. Outside China, GE will supply XD’s portfolio of primary high-voltage equipment. Turko says that access to XD’s high-voltage technology will help GE grow in the $100 billion transmission and distribution industry. This includes building more efficient and reliable systems in industrialized countries, and more robust electrical systems in emerging economies designed to meet rising demand from the industrial, water and telecommunications sectors as well as ordinary citizens.
John Lavelle, president and CEO of GE’s Digital Energy business, says that global grid modernization investments will grow by ten percent over the next five years. In China alone, the government expects to invest $600 billion in electrical infrastructure over the next decade.
“With the world’s electricity demand expected to increase by more than 70 percent by 2035, we are better positioned to help utilities and industrial customers upgrade their electrical infrastructure,” Lavelle says.
Says Dan Janki, president and CEO of GE Energy Management: “Our investment in XD Electric is core to our long-term strategy to build a world-class transmission and distribution franchise and become a leading provider of grid modernization solutions.”
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