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German manufacturer Siemens has announced that it is to sell its solar business activities as part of a reorganization of its energy division and is already in talks with a number of potential buyers.
As part of the restructuring, Siemens will discontinue its Solar & Hydro division. The divestment of the solar business activities will enable Siemens to focus its renewable energy activities only on wind and hydro power, the company said.
The divestment is in line with Siemens’ new company-wide programme which was announced on October 11. Under the programme, Siemens will focus on five areas, namely cost reduction; go-to-market; simplified governance; optimized infrastructure and strengthen core activities. The aim of the newly launched programme is to enable Siemens to meet its own ambitious goals and to underscore the targets defined in the One Siemens framework.
Reasons cited for the divestment — which falls under the “strengthen core activities” category of its new programme — include lower growth and strong price pressure in the solar markets. As a result, 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 Süß, a member of the Managing Board of Siemens and CEO of the Energy division.
Siemens also intends to sell the division’s photovoltaic activities and is in talks with several parties who are interested in purchasing these activities. However, the company stated that it would continue to offer 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 they are sold.
The Solar & Hydro Division generated revenue in the low triple-digit millions in the last financial year and has roughly 800 employees, of which 200 are in Germany.
Renewable energy remains an important focus area for Siemens. The company predicts that energy from renewable sources will account for 28% of the global power mix in 2030. According to its estimates, global power consumption will rise from 22,100 TWh to 37,100 TWh in 2030. However, it believes that hydro power and wind energy will contribute the largest share of energy from renewable sources.