January 17 2007 – AES Corporation and GE Energy Financial Services has announced its intention to create a partnership to develop greenhouse gas emission reduction projects in the United States.
The partnership would seek to create an annual production volume of 10 million tonnes of greenhouse gas offsets by 2010, primarily through the reduction of emissions of methane – a potent greenhouse gas with a warming potential 21 times greater than carbon dioxide.
Projects to capture and destroy methane emissions would include agricultural waste, landfills, coal mines and wastewater treatment. In addition to methane-based projects, the partnership may also pursue development of offsets through energy efficiency projects and electricity generation from renewable sources.
The partnership would sell offsets from these projects to commercial and industrial customers seeking to reduce the environmental impact of their operations or to provide climate-friendly products or services to their customers.
“AES is committed to helping address climate change as part of our broader alternative energy strategy,” said Paul Hanrahan, President and CEO of AES.
“Our partnership with GE will enhance the ability of the United States to expand energy resources while mitigating the negative environmental impacts of growth. We are pleased to team with GE because the combination of our skills will allow us to lead the development of the US market for carbon offsets.”
The partnership would invest in projects using equipment from a variety of manufacturers, potentially including GE products certified by its ecomagination program. GE Energy Financial Services and AES are taking this step with an immediate focus on voluntary demand for greenhouse gas reductions but with an eye toward possible future mandatory emissions limits.
“This initiative will help GE Energy Financial Services double its already sizeable $1.5 billion portfolio of investments in renewable energy projects by the end of 2008, and will contribute to GE’s ecomagination program,” said Alex Urquhart, President and CEO of GE Energy Financial Services.
Through its ecomagination program, GE has committed to help its customers meet their environmental challenges while reducing its own greenhouse gas emissions. GE has pledged to more than double its investment in the development of cleaner energy technologies, from $700 million to $1.5 billion by 2010, reduce its greenhouse gas emissions one percent by 2012, reduce the intensity of its greenhouse gas emissions 30 percent by 2008, and improve the company’s energy efficiency 30 percent by the end of 2012.
Kevin Walsh, Managing Director and leader of renewable energy at GE Energy Financial Services, added: “Our capital, sales channels and risk management – along with AES’s expertise in project development – make for a powerful combination that will lead the US carbon market.”
Last April, AES announced formation of its alternative energy group, making a $1 billion commitment to investments in wind, LNG, and climate change sectors. Last December, AES adjusted its guidance on investment in this sector to potentially as much as $10 billion over the next 5-10 years. It has already announced a target to produce up to 40 million tonnes of greenhouse gas emission offsets per year by 2012, through development projects under the Clean Development Mechanism of the Kyoto Protocol in Asia, Africa, Europe and Latin America.
“Carbon offsets play an important role in the fight against global warming,” said William Luraschi, Executive Vice President, Business Development and leader of AES’s Alternative Energy business. “AES began investing in greenhouse gas reduction projects in the late 1980’s. With our 25 years of experience in energy and a presence in virtually every region of the world, AES is well positioned to play a leading role in this sector.”
The AES/GE partnership would establish strict standards for the creation, certification and registration of US greenhouse gas emissions credits. It plans to have internationally accredited and independent environmental organizations assure that each carbon offset meets the highest scientific and technical standards.