General Electric's footprint in the energy world could soon look substantially different as the conglomerate embarks upon a transformation plan announced on Monday. The company intends to remain in the business of supplying power plants with equipment and services, an industry it dominates alongside German rival Siemens. But GE could exit the oil and gas industry, and its role in renewable energy remains somewhat uncertain. Shares of GE closed about 7 percent lower on Monday. The rise of solar and wind energy has created challenges for GE's power business, which is focused on selling and servicing the turbines and other equipment at the heart of natural gas- and coal-fired plants. GE and Siemens are selling fewer of these systems, raising questions about their ability to capitalize on lucrative service contracts. "Our power business is a challenged business right now. We've got a lot of work to do," said GE CEO John Flannery during a conference call on Monday.

"It's a heavy lift to turn around, but it's a fundamental asset, strong franchise in an essential infrastructure business. We can improve that a lot in the next one to two years," he said. Making matters worse, GE executives acknowledged a number of missteps in recent years. The company misread aspects of the power market, leaving it with large inventories of equipment. "We have exacerbated the market situation with some really poor execution," Flannery said. On Monday, Russell Stokes, the president and CEO of GE Power, said his unit would aim to cut about $1 billion in structural costs, fix operational problems and adjust the size of the business to meet the realities of the market. He also said GE is lowering its outlook for the amount of equipment it expects to sell next year. Flannery also signaled that GE will consider selling off its majority share in Baker Hughes, a separately traded company formed by the merger of GE's oil and gas unit and oilfield services firm Baker Hughes. GE Oil & Gas was primarily known as an equipment manufacturer, while Baker Hughes specializes in services like horizontal drilling and hydraulic fracturing. The company aims to better compete with giants like Halliburton and Schlumberger and to use GE's big data analytics capabilities to improve Baker Hughes' services.