Siemens outlines plan to spinoff gas and power business
/ German multinational conglomerate Siemens has outlined plans to spinoff and public list its gas and power (GP) business, as part of efforts to meet medium-term growth and profit targets.
Unanimously approved by Siemens’s supervisory board, the decision is part of the company’s Vision 2020+ strategy concept.
GP division includes the company’s oil and gas, conventional power generation, power transmission and related services businesses.
Siemens state that GP will be “given complete independence and entrepreneurial freedom through a carveout and a subsequent public listing (spinoff)”. The company also noted that the stock exchange listing is anticipated to happen by September 2020.
Additionally, Siemens is planning to give its 59% stake in renewable energies company Siemens Gamesa Renewable Energy (SGRE) to GP.
The company expects to make the decision regarding the spinoff and subsequent public listing at a shareholders’ meeting, which may be held in June 2020.
Following the decision, both the new GP and SGRE will be deconsolidated. The spinoff and transfer of SGRE stake will see the creation of a new company in the energy segment. It will have a business volume of €30bn and more than 80,000 employees.
Siemens president and CEO Joe Kaeser said: “This move will create a powerful pure play in the energy and electricity sector with a unique, integrated setup, an enterprise that encompasses the entire scope of the energy market like no other company.
“Combining our portfolio for conventional power generation with power supply from renewable energies will enable us to fully meet customer demand. It will also allow us to provide an optimised and, when necessary, combined range of offerings from a single source.
“We’re convinced that this strategic decision will be positive for all participants and enable long-term value creation for customers, employees and shareholders – as can also be seen in recent market successes such as those in Iraq, which we’ll jointly continue to pursue.”
The company revealed plans to reduce roughly 10,400 efficiency-related jobs at its core divisions. The planned structural efficiency gains are expected to result in savings of nearly €2.2bn by 2023.
At the same time, the German multinational conglomerate intends to create nearly 20,500 new jobs by 2023. /
Renewable energy additions fall flat for first time since 2001
/ Renewable energy additions remained stable at 177GW in 2018, according to analysis by the International Energy Agency (IEA). This was the first time since 2001 that renewable energy failed to grow year on year.
The added capacity represents just 60% of net additions needed each year under the IEA’s sustainable development scenario (SDS), which estimates that renewable energy additions need to grow by 300GW each year until 2030 to meet goals set by the Paris Climate Agreement. CO2 emissions also rose to a ‘historic high’ of 33 gigatonnes, despite the 7% increase in renewable electricity generation.
Solar power remained stable at 97GW after significant growth in the years 2015 to 2017. This is due to a reduction of incentives in China, which led to solar expansion falling from 53GW in 2017 to 44GW in 2018.
Worldwide, after a number of years of decline wind power rose from 48GW to 50GW, while hydropower dropped by 20% to 20GW and bioenergy increased from 7GW to 9GW.
In total China’s renewable energy additions declined from 82GW to 77GW, and the US’ capacity increased by 1GW to 18GW. The largest growth in renewable energy came from emerging countries in the EMEA region, which went from 32GW to 40GW.
IEA executive director Dr Fatih Birol said: “The world cannot afford to press 'pause' on the expansion of renewables and governments need to act quickly to correct this situation and enable a faster flow of new projects.
“Thanks to rapidly-declining costs, the competitiveness of renewables is no longer heavily tied to financial incentives. What they mainly need are stable policies supported by a long-term vision but also a focus on integrating renewables into power systems in a cost-effective and optimal way.
“These 2018 data are deeply worrying, but smart and determined policies can get renewable capacity additions back on an upward trend.” /
Ørsted reports 15% drop in profits for Q1 2019
/ Danish wind energy company Ørsted has announced its results for the first quarter (Q1) of 2019, reporting a decrease in profits despite “generally strong performance.”
The company’s operating earnings before interest, tax, depreciation and amortization (EBITDA) for Q1 2018 was $766m (DKK5.1bn), a 7% decrease from Q1 2018’s EBITDA of DKK5.5bn. Ørsted attributes this drop in profits to a “positive one-off compensation” in Q1 2018 as well as lower earnings from its gas portfolio.
This decrease was offset by a 13% increase in earnings from offshore wind farms in operation and earnings from new onshore wind farms.
The company also reported a 5% increase on return on capital employed compared to Q1 2018, as well as an increase in the “green share” of heat and power generation to 80% from 68% in Q1 2018.
Ørsted are currently in auctions for five offshore wind farms, with three in the US and two in Europe. In a conference call Ørsted CFO Marianne Wiinholt said these bids represented “significant growth in offshore wind”, noting that oil and gas majors such as Shell and Equinor are “eager” to invest in this developing market.
Ørsted CEO and president Henrik Poulsen said: “We delivered strong results in line with expectations. Our full-year guidance remains unchanged.
“During the first quarter we have continued to strengthen our portfolio within both offshore and onshore.
“We remain very pleased with the operational and financial performance of the company as we continue to expand our position as a global leader in green energy.”
Ørsted’s guidance for 2019 remains unchanged from its plans set out in 2018. The company expects an EBITDA of DKK15.5-16.5bn ($2.3-$2.5bn), with expected gross investments of DKK21-23bn ($3.2-$3.5bn). /
Iraq signs framework electricity agreement with Siemens
/ Siemens and the Ministry of Electricity of the Republic of Iraq have signed a framework electricity agreement to further strengthen the country’s power sector.
The new agreement includes short, mid and long-term addition of new highly efficient power generation capacity and builds on the exclusive memorandum of understanding (MoU) signed between the ministry and Siemens in October last year.
Under the new agreement, Siemens will also be responsible for the rehabilitation, upgrade of existing plants, and the transmission and distribution networks expansion.
The ‘Siemens Roadmap for the Electrification of the New Iraq’ has been designed to meet national reconstruction goals and support the country’s economic development.
Siemens president and CEO Joe Kaeser said: “Our mission is to secure reliable and affordable electricity for the Iraqi people and help them rebuild their country.
“This binding agreement addresses the various aspects of the roadmap. We are also committed to supporting Iraq in arranging to finance for the projects, creating attractive jobs and opportunities for small and medium enterprises.
“Investing in the country’s future workforce through education and training is close to our heart. Contributing to social and economic development is at the core of what we do and forms a significant part of this agreement.”
As part of the implementation agreement, three contracts valued at around €700m were agreed by the parties for the Phase 1 of the Roadmap.
The contracts are for engineering, procurement, construction (EPC) services for a 500MW gas-fired power plant in Zubaidiya, upgrade of 40 gas turbines with upstream cooling systems, and installation of 13 132kV substations, along with 34 transformers across Iraq. /
General Electric Renewable make financial loss in first quarter of 2019
/ GE Renewable Energy has announced that it made a financial loss of $162m for the first quarter (Q1) of 2019. The company’s revenue also fell by $42m to just over $1.6bn compared to the same period of 2018, a decrease of 3%.
Despite the financial and revenue loss, GE Renewable Energy increased its orders by $25m compared to the same period in 2018, a 1% increase. Its order backlog has also increased from $16bn in Q1 2018 to $18.5bn in 2019.
The renewable energy unit received 970 orders for wind turbine units in Q1, compared to 936 orders in Q1 of 2018. Its sales increased by one, from 352 to 353 units.
In its report GE Renewable Energy cited project cost overruns in onshore wind and hydro, along with increased spending on the Haliade-X and Cypress wind turbines as the reasons for the financial loss.
GE Renewable Energy CEO Jerome Pecresse said: “We continue the pace of our research and development investments and are seeing significant progress in technology as a result. We achieved notable milestones in both our Haliade-X and Cypress platforms in the quarter.
“Our backlog is up by 16% versus the previous year. Negative year-over-year revenue and operating profit results are as expected. We have a very strong delivery schedule for the next three quarters and we remain on track to deliver on guidance for the year.
“We announced the expansion of our renewable energy portfolio to include grid solutions, and solar/storage hybrids. With one of the broadest portfolios in the renewable energy industry, we are uniquely positioned to help our customers address the global energy transition.”
GE Renewable Energy are the third largest installers of onshore wind turbines in the world, with nearly 5GW installed in 2018. /
Wind groups collaborate on health and safety through SafetyOn
/ Onshore Wind organisations have launched SafetyOn, a health and safety group that will be dedicated to transparency and good practise in the industry.
SafetyOn is a non-profit, member-led collaboration of industry leaders, health and safety experts and regulators in the wind industry. It will collect data on health and safety across the sector and work towards mitigating emerging risks through co-operation and shared information.
The group will be led by professional membership body the Energy Institute (EI), who is the project manager and secretariat of the group. The 19 founding members of SafetyOn include companies such as EDF Renewables, Siemens Gamea Renewable Energy and SSE Renewables.
EI CEO Louise Kingham said: “With thousands of people employed in the UK’s onshore wind industry, SafetyOn is playing a part in making sure they return home safe.
“As a global partner to the energy industry, the EI is pleased to support the work of SafetyOn in ensuring inclusivity across the whole sector using its tested collaboration model, working in partnership with the HSE and other regulators to uphold safe and responsible operations.”
Founding member company Vestas Celtic Wind Technology’s service director Keith Wallace added: “I am in no doubt that the formation of SafetyOn will be instrumental in the positive progress of safety performance for onshore wind in the UK.
“Through SafetyOn we can drive collaboration and accountability as a team to leverage this experience for the wider benefit. We must take the lead by solving common problems together, setting high standards and deliver on our commitments.”
SafetyOn was launched the Renewable Wind & Emergency Response conference in Birmingham. /
UK Government energy generation statistics show rise in renewables
/ Statistics from the UK Department for Business, Energy and Industrial Strategy (BEIS) indicate that the UK’s energy supply increasingly comes from renewable sources at the expense of fossil fuels.
The figures show that in the fourth quarter (Q4) of 2018 renewables formed 37.1% of the country’s energy supply, a 7% increase on Q4 in 2017. This makes renewables the UK’s second biggest source of energy behind gas, which fell from 40% in Q4 of 2017 to 37.9% in Q4 of 2018.
Nuclear power fell from 18.1% at the end of 2017 to 16.5% in 2018. Low-carbon sources in total reached 53.6% in the quarter, just above the 2018 average of 52.8%.
Coal continued to decline, going from 9.1% in Q4 of 2017 to 5.7% in Q4 2018, while oil and gas remained stable at 2.7%. Total electricity generation decreased by 1.4% from 339 terawatt (TWh) hours in 2017 to 334TWh in 2018.
Since 2008, energy obtained from renewables has risen by over 400% from 22TWh to 111TWh, whilst coal has declined by 86% since 2008, falling from 124 terawatt hours (TWh) to just 17TWh.
A BEIS spokesperson said: “We continue to lead the world in clean growth, going further than any other G7 nation by cutting our emissions by over 40% since 1990, whilst growing our economy.
“The UK has already gone more than 833 hours without coal this year, and we are investing £2.5bn in low carbon innovation through our modern Industrial Strategy.
“All this means the UK is firmly on track to meet its target to phase out coal completely by 2025.”
The BEIS also tweeted: “The latest quarterly stats from our major power generators show the UK is continuing to move to a cleaner, greener energy mix.”
Statistics from the UK Department for Business, Energy and Industrial Strategy (BEIS) indicate that the UK’s energy supply increasingly comes from renewable sources at the expense of fossil fuels.
The figures show that in the fourth quarter (Q4) of 2018 renewables formed 37.1% of the country’s energy supply, a 7% increase on Q4 in 2017. This makes renewables the UK’s second biggest source of energy, behind gas at 37.9%, having fallen from 40% in Q4 of 2017.
Nuclear power fell from 18.1% at the end of 2017 to 16.5% in 2018. Low-carbon sources in Total reached 53.6% in the quarter, just above the 2018 average of 52.8%.
Coal continued to decline, going from 9.1% in Q4 of 2017 to 5.7% in Q4 2018 while oil and gas remained stable at 2.7%. Total electricity generation decreased by 1.4% from 339 terawatt (TWh) hours in 2017 to 334TWh in 2018.
Since 2008, energy obtained from renewables has risen by over 400% from 22TWh to 111TWh whilst coal has declined by 86% since 2008, falling from 124 terawatt hours (TWh) to just 17TWh.
A BEIS spokesperson said: “We continue to lead the world in clean growth, going further than any other G7 nation by cutting our emissions by over 40 per cent since 1990, whilst growing our economy.
“The UK has already gone more than 833 hours without coal this year, and we are investing £2.5 billion in low carbon innovation through our modern Industrial Strategy.
“All this means the UK is firmly on track to meet its target to phase out coal completely by 2025.”
The BEIS also tweeted: “The latest quarterly stats from our major power generators show the UK is continuing to move to a cleaner, greener energy mix.” /