With cheap gas, nuclear is ‘hard to justify’, says GE chief

Speaking in an exclusive interview with the Financial Times (FT), Jeff R. Immelt, CEO of General Electric (GE) (NYSE:GE) says that because nuclear power is so expensive compared to other forms of energy it has become “really hard” to justify, adding that: “It’s really a gas and wind world today”.

“When I talk to the guys who run the oil companies they say look, they’re finding more gas all the time. It’s just hard to justify nuclear, really hard. Gas is so cheap and at some point, really, economics rule.”

“So I think some combination of gas, and either wind or solar … that’s where we see most countries around the world going.”

Immelt’s comments underline the impact on the global energy landscape of the US shale gas revolution, Japan’s 2011 Fukushima nuclear meltdown and falling prices for some types of renewable power, says the FT.

In the US, for example, the shale boom has sent natural gas prices to a ten-year low, a trend some analysts believe will spread elsewhere, while the nuclear industry faces added costs and uncertainty after Fukushima.

Furthermore, a 75 per cent fall in solar panel market prices in the past three years has made solar power competitive with daytime retail electricity prices in some countries, according to a recent report by Bloomberg New Energy Finance, while offshore wind turbine prices have steadily fallen.

In the interview, Immelt played down the impact of such changing energy trends on a company as large ad diverse as GE, which reported annual profits of $13bn last year and sells products for every leading source of power generation - from nuclear reactors to gas and wind turbines.

“We’ve got them all, so in some ways when you have them all you don’t have to be so smart about anything,” he said.

According to the FT, analysts estimate GE’s nuclear revenues, from a joint venture with Japan’s Hitachi, at $1bn, or less than 1 per cent of annual global sales.

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