This quarterly report contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risks and uncertainties, many of which are beyond our control. Our actual results could differ materially and adversely from those anticipated in such forward-looking statements as a result of certain factors, including those set forth below, elsewhere in this report, and in "Risk Factors" in Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "Commission") on March 31, 2008.

Important factors that may cause actual results to differ from projections include:

- our lack of operating history;

- our dependence on additional financing;

- our inability to establish production facilities for our KDV products and to generate revenues from sales of our bio-fuel, diesel and castor oil;

- our inability to commercialize and develop the technology we have licensed;

- governmental regulation and oversight, including whether or not we are able to obtain the governmental approvals necessary to allow our bio-fuel to be marketed as "bio-diesel," a fuel additive, or, alternatively, to be marketed as a new class of bio-fuel or diesel;

- market acceptance of our bio-fuel or diesel;

- unexpected costs and operating deficits, and lower than expected revenues;

- adverse results of any legal proceedings;

- unexpected costs due to the global economic crisis; and

- other specific risks referenced in this quarterly report.

All statements, other than statements of historical facts, included in this quarterly report or otherwise provided by us regarding our strategy, future operations, financial position, estimated revenue or losses, projected costs, prospects and plans and objectives of management are forward-looking statements. When used in this report, the words "will," "may," "believe," "anticipate," "intend," "estimate," "expect," "project," "plan" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. All forward-looking statements speak only as of their respective dates. We do not undertake any obligation to update any forward-looking statements or other information contained in this report. You should not place undue reliance on these forward-looking statements. Although we believe that our plans, intentions and expectations reflected in or suggested by the forward-looking statements in this report are reasonable, these plans, intentions or expectations may not be achieved.

In this report, unless otherwise specified, all dollar amounts are expressed in United States dollars. All references to "common shares" refer to the common shares in our capital stock.

As used in this quarterly report, the terms "we", "us", "our", "the company" and "Global" mean Global Energy Inc., and our subsidiaries, unless otherwise indicated.

Overview

Global Energy Inc. is a development stage company that intends to acquire, build and operate facilities in various locations around the world that will use a proprietary technology and process to produce a high quality diesel fuel utilizing a range of feedstocks such as municipal solid waste or any hydrocarbon-based material such as biomass, plastic, paper, wood, leather, textiles or waste oils.

During the past five years, we have observed efforts in the United States and the European Community to develop facilities for the production of renewable, alternative fuels - primarily biofuels based on corn and other feedstocks. We believe that the United States has focused primarily on ethanol while the European Community has focused primarily on biodiesel. Today, the production of both ethanol and biodiesel has been constrained by price increases for their respective primary feedstocks, corn and rapeseed.

Against this background, the emerging alternative fuels industry has placed a high priority on developing and deploying new technologies capable of utilizing abundant waste streams instead of corn and other feedstocks for the production of alternative fuels. While we have noted that much attention has been focused on high profile waste streams such as Municipal Solid Waste ("MSW") and biomass waste derived from agriculture and forestry, we believe there are many other high volume industrial waste streams available for use as alternative fuels. We have also determined that unlike traditional biofuels based on corn and other food based feedstocks, which must be purchased in order to be converted into ethanol or biofuel, the utilization of waste streams as feedstocks to produce alternative fuels also offers the potential of earning additional revenues from garbage tipping fees and through the recycling of waste.

Our offices are located at 415 Madison Avenue, 15th Floor, New York, NY 10017. We maintain a website located at www.global-energy.biz. The contents of our website are not part of this report.

Recent Developments

On September 22, 2008, we entered into an amending agreement with YA Global Investments L.P., or Y.A. Global, our senior secured lender, with respect to outstanding secured convertible debentures in the aggregate principal amount of $4,000,000, and warrants to purchase 600,000 shares of our company's common stock owned by YA Global. The amendment updates and supersedes an amending agreement we entered into in July 2008.

The amendment allows us to, among others, immediately defer certain principal and interest payments due under the debentures. In consideration of YA Global's amendment, we have agreed to issue to YA Global 1,000,000 restricted shares of our common stock. Additionally, the amendment stipulates that if we raise a certain amount of cash in private offerings before October 31, 2008, among others, we shall pay YA Global certain amounts from the proceeds of the said offerings and from the cash flow of our Ethiopian subsidiary, Global Energy Pacific Limited, the conversion price of the debentures will be reset, the payment schedule for the debentures will be revised and the exercise price of the warrants will be reset and the total number of shares underlying the warrants will be increased. As of October 31, 2008, we raised $1,500,000 - the defined minimum offering threshold to enter the amendment into effect.

Critical Accounting Policies

A. Going concern considerations

As of September 30, 2008, we had negative working capital of $3,228,000 and an accumulated capital deficiency of approximately $1,928,000. Our ability to continue to operate as a going concern is dependent on our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing and to ultimately attain profitability. We have no revenues and have incurred losses and an accumulated deficit resulting from our activity as a development stage company and have a negative cash flow from operating activities. In the event we are unable to successfully raise capital and generate revenues, it is unlikely that we will have sufficient cash flows and liquidity to finance our business operations as currently contemplated.

There can be no assurance that additional funds will be available on terms acceptable to us, or at all. These conditions raise substantial doubt about our ability to continue to operate as a going concern. The financial statements contained in this report do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty. We are also currently committed to repay loans in the aggregate principal amount of $586,000 during the period ending March 31, 2009.

B. Derivative financial instruments ("derivatives")

We have adopted FAS 133, as amended, which establishes accounting and reporting standards for derivatives, including certain derivatives embedded in other contracts, and for hedging activities. Under FAS 133, all derivatives are recognized on the balance sheet at their fair value. On the date that our company enters into a derivative contract, it designates the derivative, for accounting purposes, as: (1) hedging instrument, or (2) non-hedging instrument. Any changes in fair value are to be reflected as current gains or losses or other comprehensive gains or losses, depending upon whether the derivative is designated as a hedge and what type of hedging relationship exists. Changes in fair value of non-hedging instruments are carried to "financial expenses-net" on a current basis.

Results of Operations - For the Nine Month Period Ended September 30, 2008

We initiated our activities during the last six months of 2007, focusing our effort on building an infrastructure that would support our future activities in the alternative energy field. We did not generate any revenues in the nine month period ended September 30, 2008 and incurred a loss of $2,768,000 during that period.

Liquidity and Capital Resources

On September 30, 2008, we sold 30 units to 27 investors for an aggregate purchase price of $1,500,000. As of September 30, 2008, our cash and cash equivalents were $1,119,000 compared to $ $1,470,000 as of December 31, 2007, respectively, and we had a negative working capital of $3,228,000. We are expecting to continue to expend cash in our activities through payments of salaries, our business development activities, payments for services and other costs. We also plan to continue to finance our operations through a combination of private placements, stock issuances, debt issuances, mutual development agreements with possible milestone license payments and research and development programs. We cannot assure, however, that we will be successful in obtaining the adequate level of financing required for the long-term development and commercialization of our planned products.

We do not currently have off-balance sheet arrangements.

Going Concern Considerations

As of September 30, 2008, we had negative working capital of $3,228,000 and a capital deficiency of $1,928,000. Our ability to continue to operate as a going concern is dependent on our ability to generate sufficient cash flows to meet our obligations on a timely basis, to obtain additional financing and to ultimately attain profitability. We have no revenues and have incurred recurring operating losses and an accumulated deficit and have a negative cash flow from operating activities.

In the event we are unable to successfully raise capital and generate revenues, it is unlikely that we will have sufficient cash flows and liquidity to finance our business operations as currently contemplated. Accordingly, we will likely reduce general and administrative expenses and cease or delay development projects until we are able to obtain sufficient financing. There can be no assurance that additional funds will be available on terms acceptable to us, or at all.

These conditions raise substantial doubt about our ability to continue to operate as a going concern. The accompanying financial statements do not include any adjustments to reflect the possible future effect on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainly.

Plan of Operation

For the 12 months ending September 30, 2009, we estimate expending a total of approximately $6,850,000 million for our proposed business activities. This amount includes the funds required to finance our marketing activities, purchase KDV machines, pay salaries of the employees, office and maintenance costs, pay cost of cultivation, among others, in order to execute our plan of operations. The following table provides our current estimate of the break down of costs for the upcoming year of operations.

Estimated Funding Required During the Next 12 Months

 G&A Salaries                                             $   350,000
 Other Operations                                         $ 2,000,000
 Industrial Expenses                                      $ 3,500,000
 Total                                                    $ 6,850,000