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

EnAppSys Capacity Margin

Return of high winds set to boost UK capacity margin

The fire that saw half of the Didcot B power plant taken off the grid this week will not threaten the UK’s energy security...
Dr Andrew Minchener OBE

World Bank ‘misguided’ on decision not to bankroll coal

The head of the IEA Clean Coal Centre says moves by the World Bank and other institutions to end investment in coal-fired ...

Almunia says Hinkley approval sets no precedent

European Commission vice-president Joaquín Almunia said today that the EC’s approval for Hinkley Point C nuclear plant in ...
Nuclear power plant

E.ON files for $481m in damages against German government

Angela Merkel’s German government is facing a $481m compensation claim from E.ON over regulations imposed on the company’s...

China tops renewables investment poll but UK slips down

China is now the top destination for renewables investment in the world according to an influential poll published today.

PEI Magazine Issues



>> Current Issue           >> Past Issues

Latest Wire News

AdvanceTec Industries Participates in the 2014 Canadian Wireless Trade Show

AdvanceTec Industries Participates in the 2014 Canadian Wireless Trade Show

Vantage Drilling Company Schedules Third Quarter 2014 Earnings Release Date and Conference Call

Vantage Drilling Company Schedules Third Quarter 2014 Earnings Release Date and Conference C...

UL Workplace Health & Safety Donates Online Training Courses to Healthcare Organizations

UL Workplace Health & Safety Donates Online Training Courses to Healthcare Organizations

Cyclone Power Technologies Receives $175,000 License Fee From Its Waste-Heat-to-Power Licensee

Cyclone Power Technologies Receives $175,000 License Fee From Its Waste-Heat-to-Power Licensee

Schneider Electric Named a "Visionary" in Gartner Magic Quadrant Report Analyzing GIS Providers for Utilities

Schneider Electric Named a "Visionary" in Gartner Magic Quadrant Report Analyzing GIS Provid...


Editorial Guides

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

Huggenberger AG

AVC Specialists Inc

POWERCON 900 electrostatic precipitator voltage controllers, RAPPERCON 9...

Standardkessel-Baumgarte Group

Founded more than 80 years ago, Standardkessel and Baumgarte are today a...

URS

URS plans, designs, engineers, constructs, retrofits, and maintains powe...

Mid America Engine Inc

Mid-America Engine is a distributor and reseller of new and used, diesel...

Moisttech

Dynamic Systems Inc

Barcode Tracking Includes: > Equipment & Tool > Inventory > ID Badge Sys...

EPG Enginuity Portable Grid

Enginuity Portable Grid (EPG) designs and manufactures unique rental gra...

M+M Turbinen-Technik GmbH

M+M Turbinen-Technik designs and manufactures steam turbines and package...

Paharpur USA

Manufactures water cooling towers, air cooled heat exchangers (fin fan c...

Buyers Guide Products

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

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

Steam turbine maintenance / overhaul / (blade) repair / outage management

Outage delivery/managementOn-site inspecti...

Gas turbine maintenance / overhaul / (blade) repair / outage management

Outage delivery/managementProject manageme...

Hydro turbine maintenance / repair / overhaul / rebuild service

Outage support in workshop/on-site Site i...

Inspection service (Nondestructive testing and evaluation)

Life time evaluationPhased array /Ultrason...

Transformer Oil Moisture Measurement Instruments

Vaisala offers a wide variety of online tr...

DPT145 Multiparameter Transmitter for SF6 Gas

DPT145 is a unique innovation that enables...

SNCR - NOxOUT and HERT

25-50% NOx reduction - Urea-based Customiz...

TIFI Targeted In-Furnace Injection

Improve Fuel Flexibility - Reduce Slagging...

ASCR Advanced SCR

80% + NOx Reduction - Lower Capital and Op...

Power Engineering International

Whitepapers

Understanding Moisture Dynamics in Power Transformers

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 >>