Image source: GE.

Undoubtedly, 2015 has been quite the year for General Electric (NYSE:GE). The industrial giant has been hard at work divesting the majority of GE Capital since April, shedding assets that don't support its industrial activities. Through Dec. 4, GE has announced approximately $146 billion of assets sales.

Once the divestment is completed, management believes GE will become a streamlined industrial company, while reducing its balance sheet's susceptibility to financial shocks, decreasing its financial regulatory oversight, and improving its longer-term earnings growth prospects. By the end of 2018, GE is shooting for 90% of its earnings to come from industrial activities.

Of GE's seven industrial segments, power and water represented 25% of its total industrial revenue through the first nine months of 2015 -- the largest of any segment. By profitability, power and water ranked second to GE's aviation segment, but that's likely to change in the future, now that the $10.3 billion Alstom acquisition was completed in November, and the majority of it will be reported under power and water.

Power and water explained
At its core, power and water serves governments and industrial companies that are in the business of power generation and water-related processing on a utility scale. Its power generating portfolio is expansive, ranging from gas turbines to nuclear and renewable energy, while its water portfolio offers solutions for wastewater, water treatment, and general processing. It also provides a wide variety of services that compliment its product portfolio.

Here's a breakdown of power and water's revenue in 2015:

Image source: GE.

2015 business results
Through the first nine months of 2015, power and water's revenue increased by 4% year over year to nearly $19 billion, translating to a $3.4 billion operating profit -- an increase of 5%. This growth was primarily driven by an increase in volume of power generation and renewable energy equipment sales, which was partially offset by continued strength of the U.S. dollar. The overall segment closed out the first nine months of 2015 with a 4% annual increase in orders. By sub-segment, services orders increased by 4.5% to $9.9 billion, while equipment orders increased by 3.1% to $9.2 billion.

Image source: GE.

The Alstom factor
Alstom may have been GE's largest acquisition in company history, but management expects it will generate $3 billion in annual savings and synergies five years after the merger. Strategically, bringing Alstom under GE control expands GE's emerging market presence and renewable energy portfolio, and makes its power-generating installed base the largest in the world.

What's more, combining Alstom's expertise in steam power generation with GE's expertise in gas-power generation means GE can better compete in the global power-generation market by offering the world's most efficient -- and complete -- power plant solution.

To get a sense of Alstom's revenue base, the following table illustrates if Alstom's was part of GE in 2014:

Image source: GE.

2016 and beyond
Next year, GE power and water is poised to benefit from having the majority of Alstom under its umbrella. Including its energy management business, which isn't reported under power and water, management estimates Alstom will earn $0.05 per share in 2015 and $0.15 to $0.20 per share by 2018, representing an annualized earnings growth rate of approximately 15%.

Looking beyond Alstom, GE's power and water segment has a tremendous opportunity to improve the quality of lives for a large population of people, while enriching itself in the process. After all, there are still 1.3 billion people across the world who lack access to reliable electricity, and 783 million people who don't have access to clean drinking water.

Ultimately, between GE's improved competitiveness in power generation thanks to Alstom and a long-term opportunity to serve humanity, it seems likely that power and water will remain GE's best business segment for years to come.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.