How GE gambled on fossil fuel power, and lost

New York

LAST March, executives at General Electric Co's power-plant business gave Wall Street a surprisingly bullish forecast for the year. Despite flat demand for new natural gas power plants, they said GE Power's revenue and profit would rise.

Showing data from financial firm Lazard and other sources, their presentation said natural gas, coal and even some nuclear power plants were the lowest-cost producers of electricity on the planet, cheaper than wind or solar.

"Gas is the most economical energy source today," one slide read. In the days following the conference, GE's shares rose 2 per cent. But its forecast turned out to be a mirage.

Rather than rising, GE Power's profit fell 45 per cent last year, forcing GE to slash its overall profit outlook and cut its divide…