Can carbon capture, nuclear energy, and wind and solar farms scale up quickly enough to save the planet?
The CEO of GE Vernova, Scott Strazik, outlines the developments in green energy for 2024. About a quarter of the electricity produced worldwide is powered by GE Vernova, a recently formed business that was spun out from General Electric. According to Strazik, the potential of renewable energy is limited by the current electrical grid, which is why it sorely needs a “new brain.”
This is a condensed version of an interview that was conducted with Rapid Response and hosted by Bob Safian, the former chief editor of Fast Company. Rapid Response, from the folks behind the Masters of Scalepodcast, is a series of frank discussions with today’s most influential business leaders as they navigate pressing issues. To guarantee you never miss an episode, make sure to subscribe to Rapid Response wherever you get your podcasts.
GE has been in existence for a while. GE Vernova is a recent model. The word “Vernova” is your invention. Why did you decide on this option?
GE Vernova has only been in operation for two months. On April 2nd, we broke away from General Electric. Moreover, around 25% of the electricity produced worldwide today comes from our equipment.
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Initially, we had to determine if we wanted to keep the “GE” in our branding. Because it is a fact that the world is changing and we must adapt to it. And that is the origin of the word “Vernova.” Verde—Green. Nova—New. New green innovation.That does not imply that we are escaping our history. We take pride in that. However, given the goals and difficulties the world faces, a new approach to doing things will be necessary. And the fact that Vernova is a new company was made clear to all of our stakeholders. It is a new day.
Leaders of energy companies have not always concurred that human activity has an impact on climate change. What is GE Vernova’s perspective on this?
Now is the moment. The good news, in my opinion, is that most leaders no longer deny the existence of climate change. Time is not on our side in this real situation. Long-term goals are something we can set and should be prioritized. However, we must move quickly. The technology available to us today must be used to spur action and make a difference. For if we set too lofty and distant goals for ourselves, it might not matter if we succeed in reaching them if we do not make progress today.
And the technology is available now?
There is more technology than the general public realizes. How to industrialize and scale that technology is the challenge. Our century-old electric power system needs to be transformed within a maximum of 20 years. We must reconstruct this infrastructure more quickly and effectively than anyone has ever done before.
AI would play a significant role in the future energy system. There are AI data centers with extremely high energy consumption. Additionally, they require more reliable and sustainable energy sources. Small modular reactors, or nuclear power, is one of the topics under discussion. How near is that technology then? To what extent is it safe?
AI is essential to the future direction of the industry. Over the last 20 years, there has not been much increase in the demand for electricity in the United States. Data centers and artificial intelligence (AI) are two of the many forces altering that dynamic. The demand has increased. Small modular reactors are undoubtedly one solution to the growing demand. And in 2029, we plan to commission Canada’s first small modular reactor, rated for 300 megawatts.
Although those initial projects are costly, the idea behind a small modular reactor is that we can lower the cost curve in a different way than nuclear has in the past by repeatedly producing the same small 300 megawatt block of power. Since very few nuclear plants worldwide have actually completed projects on schedule and within budget. That is because every individual has been distinct from the others. We are quite confident that we can reduce that cost curve by modularizing to a smaller solution. Thus, this begins to become an extremely significant component of the electric power system as we approach the middle of the following ten years.
For GE Vernova, wind power represents a core offering. States have recently experienced the failure of their offshore wind projects. How far out on offshore wind are you?
It is significant but also complex. The offshore wind industry has faced several frightening headlines over the last two years, and the economics of the sector have undoubtedly been tested. That being said, the world will require offshore wind in the next five to ten years. Offshore wind is essential for both decarbonizing and electrifying regions like the Northeast. Therefore, we think offshore wind will be essential in the future. The cost will be higher than with onshore wind. It will cost more than solar energy. However, we must consider the appropriate analogies, which are… Does it cost more than a brand-new nuclear power plant? Is the cost higher than that of carbon capture? We are certain that offshore wind is a more cost-effective solution.
It seems that each location’s best renewable solution must be determined by taking into account the local conditions as well as the available economics.
That relates to promoting the efficiency that the global community requires. You will need to utilize that resource every day if the wind and sun are favorable. Similarly, where it makes sense, we are spending a lot of money on carbon capture. Utilizing the resources at your disposal and adopting a “all the above” mentality are necessary if you want to change the electric power system. We do not enter the room at Vernova sporting a nuclear, gas, or wind hat. We use these technologies to play. Applying the most effective economic technologies to the available resources at the site is our goal.
Due to its lengthy history, GE has developed a distinct operating style. I am aware of your desire to move more quickly and like a startup. So how does one go about doing that in a company the size and duration of Vernova?
Great businesses, in my opinion, manage to solve problems and meet short-term needs while making time or space for long-term innovations. Fundamentally, our goal as a company is to foster an environment where people feel safe enough to take risks with things that have the potential to significantly alter the course of history.
We never lacked ambition, in my experience working at GE. However, culturally, we might not always have struck the correct balance between fostering long-term breakthroughs and safeguarding to deliver results in the short term. And that is a lot of what Vernova and I are currently working through.
I have been the CEO of a public company for two months, and this is a whole new experience. In comparison to what I do now, working for a large corporation affords me the advantage of being better able to navigate the outside world. We also do not have as many internal dynamics to manage. So that’s empowering. However, it also carries a responsibility, as General Electric was a company I was extremely proud to work for, leading in sectors like power, aerospace, and healthcare. However, when you operate across multiple industries, it is possible for having too many goals to be none at all. It is expected of us, as a company designed specifically for the energy transition, to drive this sector forward. And that is precisely what we want to accomplish.
Due to the enormity of climate change, progress must be made while maintaining everyone’s enthusiasm. But change is so slow. What is your opinion on striking a balance between the need to move forward urgently and patience at the same time?
The frequency and intensity of the daily events brought about by climate change are increasing more quickly, despite the fact that some of our solutions have long lead times. This is evident in the extreme weather events we witness. Thus, I believe that in a long-cycle business, finding daily motivation to complete this work is fairly simple because it is worthwhile.
