General Electric builds the electricity grid of the future. This is what we found on tour.

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Niskayona, N. j-in

General Electric
‘s

A sprawling research center here, you’ll find the two Nobel prizes I won

GE

Scholars, Thomas Edison’s Office, and Current Research That Can Help Create electrical network from the future.

A research center in upstate New York works on everything from electric aviation to the electric grid. The network is where some of the center’s most interesting technologies may impact the business as soon as possible.

It starts with transformers. Electrical energy is transmitted at a high voltage to achieve maximum efficiency. The voltage coming out of the power plant can easily be north of 100,000 volts. The transformer—a large box with iron, copper, and some oil—increases or lowers the voltage.

This higher voltage entering another part of the system, such as a substation, may be reduced by a large transformer to a few thousand volts for transmission to homes. Much smaller transformers buzzing telephone poles take this voltage and lower it to levels familiar to consumers – about 240 volts.

Show GE Baron what you call a flexible adapter It’s a massive piece of electrical equipment – a first of its kind – to be purchased by a utility.

The flexible transformer comes with a “knob” that allows operators to vary the resistance of the transformer – a technical term that partially describes electrical resistance. Variable impedance will be beneficial with the spread of renewable energy generation. The power output of solar arrays can be very minute by minute. Having a flexible transformer can make it easier to manage the transfer of power from such a source.

Flexibility also comes in how this new adapter is deployed. It’s a bit like a universal utility spare part. Utilities, of course, should have backup transformers in case one of them fails. Transformers can take a year to build. Nobody wants a power outage for a year. Moreover, it turns out that these huge transformers are all, basically, made to order. Designed for a specific location and configuration.

The flexible transformer offers a huge benefit to the utility industry. Instead of having 10 backups for 10 substations using 10 different voltage ratios, now one transformer or maybe two backup transformers can do the job.

There are other advantages and improvements represented by the flexible switch. It’s smarter. It can better react to various conditions such as heat, lightning and storms, which helps the network to be more robust. When the power goes out these days, it’s often because the transformer has failed. General Electric says its new generation of transformers will fail often.

GE scientists tell an engineering joke that if the inventors of the transformer came back today they would learn about the technology. Not much has changed. (Engineers love this joke.)

This cannot remain the case forever even though the grid is getting more and more complex with the proliferation of generation sources such as wind and solar as well as battery backup and all the solar roofs people are installing.

The network of the future will require better and more flexible hardware. It would also require software to manage all of the increased complexity. GE scientists are working on it, too.

GE has a mini-grid of the future operating on campus. Solar arrays provide power and charge huge batteries that provide power when the sun isn’t shining. All of this is managed by GE hardware and software.

All this research and development in the network is benefiting GE Vernova . business. General Electric disintegrates into Three companies: One for aviation and the other for healthcare and the remaining business, Vernova, will feature GE’s gas and renewable energy power along with GE’s digital and networking business.

At its core, the Vernova will contain the original power generation works dating back to Thomas Edison. These days, GE makes everything from converters to wind turbines. It even has a nuclear action. GE’s products account for about a third of electricity production worldwide.

Vernova is a business that investors have a hard time valuing. General Electric is a leading producer of gas turbines, giant engines that use natural gas to produce electricity. If your local utilities need power quickly, you should probably run a gas turbine to get the juice.

Investors are questioning whether electricity generation using natural gas will decline as governments try to cut out fossil fuels. GE’s renewable business isn’t making money at the moment. Its digital business and network are not reported as separate segments.

Baron It is believed that Vernova could be worth in the range of $25 billion to $30 billion. It is based on reviews of similar companies like

Vistas Wind Systems

(VWS. Denmark) and

Mitsubishi Heavy Industries

(7011. Japan), which also manufactures gas turbines for power generation.

It is also based on the belief that gas turbines will be with the world for a generation to come. Renewable transformations cannot happen overnight, and gas turbines can also burn hydrogen gas one day.

Baron The valuation is likely to be higher than what the business will trade immediately after it becomes independent in 2024. Investor sentiment is very low at the moment.

But things can turn. And the need to invest in the network, make it smarter with software and more flexible with new hardware, are some of the hidden positive aspects of Vernova’s upcoming business.

What size should be seen, but electric power will not go away.

Write to Al Root at allen.root@dowjones.com