Siemens will buy out Iberdrola’s stake in wind-turbine unit Siemens Gamesa Renewable Energy for about 1.1 billion Euros ($1.21 U.S.), but the two companies will continue to work together.
German-based parent Siemens AG will pay 20 Euros per share for Iberdrola’s 8.1 percent stake in Siemens Gamesa Renewable Energy (SGRE). This will end any legal disputes between the two owners and result in a cooperation agreement focused on certain wind generation and distribution projects.
Siemens will hold a 67-percent stake in SGRE once the deal is complete. It will then contribute all of those shares into the new Siemens Energy company, a spinoff of its power segment.
“Way before anyone else, Siemens and Iberdrola had taken the first step to a necessary consolidation in the sector,” Siemens AG CEO Joe Kaeser said in a statement. “We have created a leading and robust supplier of renewable energy and believe, that SGRE still has considerable potential to grow and create significant value. SGRE is a vital cornerstone in the new Siemens Energy portfolio in order to shape the necessary energy transition from conventional to renewable energy. Time has come to take this mission to the next step.”
Siemens believes it can save as much as 100 million Euros annually from the consolidation. Siemens Energy will be a pure-play entity focused on both conventional and renewable generation.
In the U.S., the federal Energy Information Administration has forecast that wind and solar photovoltaic will outpace gas-fired plants in capacity additions this year. Some 18.5 GW of U.S. utilty-scale wind power is expected to come online in 2020.
Globally, research firm Wood Mackenzie has forecast that wind power capacity will increase 60 percent through 2024. Meanwhile, numerous international banks have promised to make their only energy investments into renewable technologies and projects.
“2020 is a pivotal year in which climate protection has reached the top of the global agenda,” said Michael Sen, member for the Siemens AG managing board and designated CEO for the new Siemens Energy. “We are convinced that the energy transition offers many opportunities for Siemens Energy. With our diverse and constantly growing renewables portfolio we can deliver tailored solutions for low carbon leaders and energy seeking countries alike.”
Gamesa began operations in Spain 44 years ago and is still headquartered there. It merged with Siemens’ wind division in 2017.
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Utility-scale wind, solar and hydro will be part of the Renewables Knowledge Hub on the floor at POWERGEN International happening December 8-10 in Orlando, Florida. The POWERGEN 2020 call for abstracts is now open until the end of the month. Click here for more information and to submit a project.