Power Engineering International

Welcome to the online version of our Power Engineering International (Pei) print publication. This is where to find archive magazine articles as well as our present edition. For any feedback on the content contact us here or discuss on PEi LinkedIn Group

A wind Bonus for Siemens

Siemens' purchase of Bonus Energy marks the German company's entry into the global wind power market and is a further signal of the growing importance of the wind power industry. Siân Green reports.

German power equipment manufacturer Siemens Power Generation has entered into an agreement to acquire Bonus Energy A/S, Denmark's second largest wind turbine manufacturer. The move marks Siemens' entry into the growing global wind energy business and an expansion of its conventional thermal product portfolio.

Bonus Energy is one of the world's five largest suppliers of wind energy systems, with a workforce of 750 and annual sales of approximately g300m ($381m). Headquartered in Brande, Denmark, it has installed more than 5000 turbines with an aggregate capacity of around 3300 MW in over 20 countries.

Bonus Energy produces wind turbine generators in the 600 kW-2.3 MW range and is a leader in the offshore sector. While financial terms of the acquisition have not been disclosed, Siemens expects the deal to close in early December.

Siemens' move into the wind energy industry had been widely anticipated. The company has doubtlessly been watching its main rival, GE Energy, forge ahead in the industry following its 2001 acquisition of Enron Wind. GE Wind now employs 1700 personnel and has installed some 6700 MW of capacity around the world. Crucially, GE has been able to leverage its global service and financing capabilities as well as its customer base to compete effectively with 'traditional' suppliers such as Nordex and Vestas.

According to Andreas Nauen, vice president of communications and strategy at Siemens Power Generation, Siemens looked for about a year to find the right company to take it into the wind energy industry. "We wanted to find a company that has the same business approach as us and that would complement our business," noted Nauen. "Bonus has a superb reputation, is very risk aware and its technology is a good fit."


Bonus Energy A/S has a seven per cent overall market share for wind turbines but is responsible for over 18 per cent of the market for larger wind turbines
Click here to enlarge image

In buying Bonus, Siemens has acquired a strong product line as well as industry expertise, customer pipelines and an order book. With these under its wing, it will be able to hit the ground running in what is a rapidly growing industry. There are currently 39 000 MW of wind capacity installed world-wide, with 8133 MW of capacity installed in 2003 – an 18 per cent increase over 2002. Growth rates are expected to remain at this level, with Europe and North America dominating the market. The extension of the Production Tax Credit in the USA is expected to provide a welcome boost for this market (see page 13).

The wind sector is therefore the fastest growing segment of the power generation market, while sales in Siemens' traditional core market – gas and steam turbine plants – are expected to decline over the next five years, according to market analysts Emerging Energy Research (EER). Siemens expects the total power plant market to shrink from 158 GW/year in 1998-2002 to 138 GW/year on average for 2003-2008. Wind will capture about ten per cent of the total power plant market by 2007-2008, according to EER. Like GE, Siemens should be able to offset declining revenues in power generation equipment with growing sales in the wind sector.

In addition, the wind sector is a maturing market, marked by falling costs, increasing project/unit scale and industry consolidation. Earlier this year saw the merger of two of the leading suppliers, Vestas and NEG Micon, and further consolidation among manufacturers is likely over the next few years as the smaller players struggle to keep up with the might of GE Wind, Vestas, Gamesa, Enercon and now Siemens.

Manufacturers and utilities alike are putting downward pressure on the cost of wind energy by increasing the scale of projects and of individual units. Canada's Hydro-Quebec recently placed an order for some 990 MW of capacity to be installed by 2012 (see page 13), while large-scale offshore schemes are being implemented in Europe. The onshore market is now dominated by the 1-2.5 MW unit size range, and the offshore sector, where unit sizes of 3-5 MW are being used or developed, is increasing in importance.

It is likely, therefore, that Bonus Energy's strength in the offshore sector was a key factor for Siemens. In 1991, Bonus supplied the world's first offshore wind farm, and in 2003 supplied the world's largest offshore wind farm – the 166 MW Nysted project in Denmark. This latter order made the company the second largest supplier of wind turbines of 2 MW or more in 2003.

Key to Siemens' success in the wind industry will be the development of a larger-scale model, capable of competing with GE's 3.6 MW and Vestas' 4.5 MW offshore units. According to Nauen, Bonus has already made strides into this crucial area and in October began onshore testing of a new 3.6 MW model for the offshore sector.

In the European market, which accounted for about 67 per cent of the total global market in 2003, Siemens should be able to build on Bonus' strong presence in the UK, Ireland and Denmark, and perhaps capitalize on Vestas' current difficulties, to achieve growth. The US however, which accounted for about 22 per cent of the market in 2003, will be a tougher nut to crack.

Bonus Energy has installed some 442 MW of capacity in the US, but recently retreated from this market to focus on Europe. "Bonus held back from this market, but it is a key market and one that we want to contribute to," says Nauen. "We will be able to leverage our presence and capabilities in the USA – through Siemens-Westinghouse, for example – to compete."

Follow Power Engineering International on Twitter




Editor's Picks
Peter Polak

Top Austrian lawyer says Commission unlikely to be challenged on UK nuclear power project

One of Austria’s foremost legal experts in the field of energy believes Vienna will not go through with its proposed legal...
Nele Scheerlinck

FANC continues to look to science for answers to reactor vessel damage

Belgian energy corporation, Electrabel, is examining every available aspect of material science as it seeks to understand ...
GE Alstom leaders after deal announced

GE-Alstom deal under the microscope once more

The European Commission is expected to announce a probe into the GE takeover of Alstom’s power equipment business next week.
Sign for Hinkley Point C

Uncertainty remains as to potency of Austrian challenge to Hinkley

While advocates of nuclear power are confident the Hinkley Point project will proceed past intended Austrian roadblocks, t...
Jonathan Robinson

Frost: No short-term change expected in EU power generation scene

Growth consultancy Frost & Sullivan predicts that there will be little change in the rate of investment in the Europea...

PEI Magazine Issues



>> Current Issue           >> Past Issues

Latest Wire News

ISO to Add Puget Sound Energy to the Energy Imbalance Market

ISO to Add Puget Sound Energy to the Energy Imbalance Market

Walter Energy Notified by NYSE of Non-Compliance With a Continued Listing Standard

Walter Energy Notified by NYSE of Non-Compliance With a Continued Listing Standard

More Than 50 U.S. Utilities to Attend 12th-Annual ARCOS Conference for Crew Callout and Crew Management

More Than 50 U.S. Utilities to Attend 12th-Annual ARCOS Conference for Crew Callout and Crew...

Vivakor Acquires Land Lease in Asphalt Ridge Area in Vernal, Utah for Oil Extraction Technology Operation

Vivakor Acquires Land Lease in Asphalt Ridge Area in Vernal, Utah for Oil Extraction Technol...

Envision Solar Announces First Sale of Solar Powered EV Chargers in the Caribbean

Envision Solar Announces First Sale of Solar Powered EV Chargers in the Caribbean


Editorial Guides

Lubrication Challenges for the Biogas Industry in 2015

The biogas industry is growing in importance as the world continues to look for alternative, clean energy sources. However...

How to cut your OPEX

How to cut your OPEX In a constantly evolving electricity market, factors such as over capacity and low coal costs can pu...

Alstom Editorial Guide: Thailand to showcase latest upgrade of Alstom's GT26 in combined-cycle

Read all about Alstom's new advanced GT26 gas turbine in the North Bangkok CCPP expansion project online with the Power En...

PLEXOS® Integrated Energy Model – Leading the Field in Energy Market Modelling

PLEXOS® Integrated Energy Modelling is an advanced software tool that employs the latest mathematical programming methods ...

Buyers Guide Companies

ComRent International LLC

Offers rentals, sales, and services of load banks for testing generators...

Advanced Energy

Advanced Energy is a global leader in innovative power and control techn...

Fluid Energy Controls Inc

ACOEM AB

ACOEM is a supplier of Fixturlaser's innovative and user-friendly equipm...

CCI Thermal Technologies Inc

A leader in the development and manufacturing of industrial heating and ...

AKG of America Inc

AKG is a worldwide design leader and manufacturer of high performance co...

Acromag Inc

CU Services LLC

Manufactures plug resistant orifices for steam line drains, recirculatio...

FLSmidth Inc

Designs and supplies pneumatic conveying systems for power, cement, and ...

Frenzelit North America Inc

Frenzelit manufactures fabric, rubber, and metallic expansion joints. F...

Buyers Guide Products

Bore Measurement

Typical applications are full bore measure...

Fixturlaser NXA Pro

This laser alignment system features many ...

Expansion Joints

Braden Exhaust Expansion Joints provide a ...

PARTS & FILTERS

Braden is uniquely qualified to provide ou...

Exhaust Systems

Leader in Exhaust Bypass, Simple Cycle, Ex...

HydroJet®-Retractable Boiler Cleaning System

A major breakthrough in furnace water clea...

IK-700® - Retractable Sootblower

Designed specifically for low maintenance,...

RETROFIT

Braden's retrofit strengths are divided in...

Air Filtration

Braden filtration offers a wide range of f...

Spare parts manufacturing / Re-engineering / CNC / CMM / Machining / workshop service

CMM/laser scanning technology (workshop, r...

Power Engineering International

Whitepapers

Understanding Moisture Dynamics in Power Transformers

In this webinar recording "Moisture Dynamics in Power Transformers" (held originally in September 23, 2014) you will have a chance to learn about the phenomena and its importance to your ...

How to lower your total cost of ownership on DC Control Power

In this whitepaper, we look at implementing battery management solutions and how smart battery management effectively lowers the total cost of DC Control power systems and the risk of their failure...

Portfolio Optimization by PLEXOS

To achieve Portfolio Optimization, PLEXOS performs the Security Constrained Unit Commitment and Economic Dispatch using Mixed Integer Programming (MIP) to minimize a cost function subject to all op...

Evaluating cogeneration for your facility: A look at the potential energy-efficiency, economic and environmental benefits

The energy-efficiency, economic and environmental benefits of cogeneration are the subject of this in-depth white paper. The paper argues that producing electricity and heat/cooling from the same f...

The Effect of Moisture on the Breakdown Voltage of Transformer Oil

Power transformers utilize oil as a heat transfer medium and a dielectric material, together with cellulose. Breakdown voltage (dielectric strength) is one of the most important parameters of trans...

Improving Mission Critical Cooling Systems With More Reliable Level Sensing

The choice of coolant level sensor may seem like an insignificant detail when designing complex machinery such as emergency generators and cranes, but if this sensor fails, the operator has no warn...

Steps Towards a Low Carbon Future: Solutions and Technologies That Will Support the Global Revolution Required

A smart grid is becoming more and more essential as clean energy becomes more dominant. In addition, the demand for electricity is expected to treble the ability to supply it over the next decade. ...

Latest Digital Edition

  Power
  Engineering
  International
Look Inside >
Cover
Current Issue

Article Archives for Power Engineering International Magazine

Latest Energy Jobs

View more Job Listings >>