General Electric (GE) wrapped up Friday its $3.2 billion acquisition of Converteam, a company with conversion technology that can turn intermittent and variable renewable energy like wind and solar into reliable power for the grid. The purchase is just one of $11 billion worth of acquisitions completed by GE's energy unit in the past year. And it's one of the most promising.
Converteam is often described as an oil and gas equipment maker. It's specialty is high-efficiency electric power-conversion components like automation controls, generators and motors used in offshore and onshore oil and gas production; renewable energy and power generation, all sectors that GE is heavily vested in.
The upshot? Converteam's technology will make GE's range of products more efficient and reliable. It's a boon for its wind turbine and solar businesses as well because it can take direct current generated by renewables and turn it into alternating current used by the power grid.
And the opportunity for this technology is broad. About 25 percent of the world's electricity is used to power motors in industrial and power-generating applications, according to GE. An entire industry valued at about $30 billion last year has grown up around finding new ways to use electricity to make industrial processes more efficient. In the past, GE Energy CEO John Krenicki has called this a 'mega-trend' in energy.
GE will have to sell Converteam's electric machinery holding company, as a condition established by the U.S. Justice Department's antitrust division, Dow Jones reporter earlier this week. The holding company makes a low-speed synchronous electric motor used in the oil and gas industry.
Photo: Flickr user odanielgp
This post was originally published on Smartplanet.com