Siemens to Divest Solar Business: Focus Renewable Energy Activities on Wind and Hydro Power
In connection with the previously announced company program 2014, Siemens will modify its business strategy and organizational setup with respect to renewable energy. The company plans to divest its solar business activities and is currently holding talks with potential buyers on this subject. Siemens intends to focus its renewable energy activities on wind and hydro power. As part of this reorganization, the Energy Sector will be slimmed down and the Solar & Hydro Division will be discontinued. Strengthening the company's focus on core activities is one of the five main points of the new company program 2014, the broad outline of which was recently announced to the public.
Due to the changed framework conditions, lower growth and strong price pressure in the solar markets, the company's expectations for its solar energy activities have not been met. "The global market for concentrated solar power has shrunk from four gigawatts to slightly more than one gigawatt today. In this environment, specialized companies will be able to maximize their strengths," said Michael Suess, member of the Managing Board of Siemens AG and CEO of the Energy Sector. Siemens also intends to part with the photovoltaic activities of the Solar & Hydro Division. Siemens is holding talks with interested parties on selling these activities. Siemens will continue to offer suitable products for solar thermal and photovoltaic power plants, such as steam turbines, generators, grid technology and control systems, which are produced outside of the Solar & Hydro Division.
Siemens will continue to operate the two Business Units Solar Thermal Energy and Photovoltaic until the sale. Thus, existing contractual obligations will currently not be affected. In the company's financial statements, the two Business Units will be presented separately from the Energy Sector, as Discontinued Operations. The remaining business activities of the Solar & Hydro Division (hydro power and solutions for energy storage devices) will remain within the Energy Sector. The company's hydroelectric activities include the joint venture Voith Hydro for conventional hydro plants and the business of tidal turbines, which was fully acquired in the spring of 2012.
"The importance of renewable energies in the global power mix will continue to grow and hydro power and wind energy will remain the major renewable contributors. Our renewable energy activities will be focused on these two areas. More than 7,000 employees work in the Wind Power Division and another 2,000 work in the related service business; and the Division has an order backlog of more than EUR 10 billion. Furthermore, we have established our company as the clear market leader for offshore wind power farms and we are also making very good progress in onshore business," Suess said.
In the future, the Energy Sector will comprise the Divisions of Fossil Power Generation (thermal power plants), Wind Power, Oil & Gas (solutions for the oil and gas industry and small to mid-sized thermal power plants) and Power Transmission. The related service business will be reported within Fossil Power Generation, Wind Power and Oil & Gas. The Solar & Hydro Division generated revenue in the low triple-digit millions in the past fiscal year and has roughly 800 employees, thereof 200 in Germany.