SIEMENS’ BIGGEST WIND SALE

Siemens sees out 2010 with largest onshore wind energy contract in its history
January 4, 2010 (Regulacion Eolica con Vehiculos Electricos)
and
Siemens Invests in Expanding Wind Power
Jack Ewing, January 3, 2011 (NY Times)

[REVE:] "Siemens has received its largest onshore wind power order to date. Siemens will deliver a total of 258 wind turbines, each with a capacity of 2.3 megawatts (MW) for several wind farm plants in Iowa...The purchaser is the US utility MidAmerican Energy headquartered in Des Moines, Iowa. After commissioning in January 2012, the combined capacity of 593 MW will be sufficient to supply 190,000 U.S. households with clean electricity...

"…[C]lean energy is a big moneymaker for Siemens. The renewable energy division, which consists mostly of the wind power business, recorded a bigger sales increase than any other unit in the quarter ended Sept. 30, rising 48 percent, to 977 million euros ($1.3 billion). New orders rose 85 percent, to 1.45 billion euros, also a company best…[T]he unit’s operating profit margin of 10.6 percent lagged that of more conventional businesses, like providing equipment for fossil-fuel power plants, and fell short of Siemens’s goal of a 12 percent to 16 percent margin. The unit made 103 million euros for the quarter, and 368 million euros for the fiscal year…about 5 percent of the total yearly profit for Siemens, whose array of products includes trains, factory equipment and X-ray machines."

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[NY Times:] "…The North American market has slumped just as Siemens, which does most of its manufacturing in Denmark, is stepping up investments in the United States and Canada…[It] opened a factory in Hutchinson, Kan., to make nacelles…has a blade factory in Fort Madison, Iowa…and is planning a plant in Tillsonburg, Ontario, to supply blades…The company’s goal is to become one of the top three suppliers of wind power equipment in the world, up from eighth or ninth now. Vestas Wind Systems, a Danish company that focuses solely on wind power, is the market leader.

"To have any chance, however, requires a foothold in China, the world’s largest market for wind power, and one of the most difficult to enter because of government policies that favor local companies. In November, Siemens opened a factory in Shanghai…a good place from which to ship equipment for offshore wind parks, a niche in which Siemens is the No. 1 equipment supplier."

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"The Asian market is the largest and fastest growing for wind power, accounting for an estimated 44 percent of global capacity…Europe is second, with 34 percent of global capacity and North America third with 19 percent…In the United States, makers of wind power equipment have had to contend with fickle government incentives and a plunge in the price of natural gas, which made wind energy less competitive. In addition, the financial crisis has made it harder for smaller operators to get loans to build wind parks…

"But Siemens will also have to contend with ascendant Chinese companies like Sinovel, Goldwind and Dongfang, which are moving rapidly overseas. The Chinese companies offer lower prices and attractive financing, and could force down prices and profit margins…"