Siemens Acquires Gas Turbine Business from Rolls Royce
Global energy giant Siemens is buying the Rolls-Royce Energy aero-derivative gas turbine and compressor business, which will strengthen the company’s position in the growing oil and gas industry as well as in the field of decentralized power generation. The purchase price is £785 million or about €950 million. The transaction is expected to close before the end of December 2014, subject to regulatory approvals.
In addition, as part of the transaction, Siemens will get exclusive access to future Rolls-Royce aero-turbine technology developments in the 4 to 85 megawatt power output range as well as preferred access to supply and engineering services. For this 25 year duration agreement, Siemens will pay Rolls-Royce an additional £200 million, or about €240 million.
By acquiring Rolls-Royce's small and medium aero-derivative gas turbines with a power output of up to 66 megawatts (ISO/wet-rating), Siemens will close a technology gap in its extensive gas turbine portfolio.
Siemens President and CEO Joe Kaeser also recently announced the company’s new Vision 2020, which plans for Siemens AG to position itself along the electrification, automation, and digitalization value chains that are projected to have the greatest long-term potential. The measures include the purchase of the major part of Rolls-Royce’s energy business and the contribution of Siemens’ Metals Technologies into a joint venture. In addition, Siemens is making its organization flatter and more customer-oriented.
“Our Vision 2020 addresses our company’s long-term perspectives along the modern electrification and automation value chains. By expanding share-based employee participation in our company’s success, we’re creating a sustainable ownership culture at Siemens,” said Kaeser.
The company also plans to expand its share plans for employees below the senior management level and increase the number of employee shareholders by at least 50 percent to more than 200,000. Siemens plans to make up to €400 million available annually for that purpose. In addition, the launch of the previously announced share buyback program of up to €4 billion will happen in the near future.
The focus on electrification, automation and digitalization is the result of the in-depth and extensive analysis begun in August 2013, according to Kaeser. The company has identified the fields where it will be able to achieve long-term growth and high profitability with its products.
In order to take full advantage of the market potential in these fields, Siemens is realigning its organizational structures. As of Oct. 1, 2014, the organization will be streamlined by eliminating the sector level and bundling business into nine divisions instead of the current 16. In addition, healthcare will be separately managed in the future.
Octopus Renewables buys Eclipse Power
The deal, which was completed with funds managed by Octopus, furthers Octopus’ involvement in the electricity distribution sector, having worked with Eclipse since 2018. It will allow Eclipse to continue the expansion of its team, while also investing in its systems, technology, and pipeline, with the ambition of making it one of UK’s leading IDNOs.
Eclipse has secured a portfolio of more than 10,000 connections across residential, industrial, commercial, battery storage and electric vehicle charging customers. Given the focus on electrification of heat, transport and industry in the UK, Eclipse is expected to play an important role in facilitating the UK’s energy transition.
Octopus Renewables is the largest investor of utility scale solar power in Europe, as well as a leading investor in onshore wind and biomass, managing a global portfolio valued at more than £3.5 billion. Institutional investor Nest partnered with the company in March.
Peter Dias, Investment Director, Octopus Renewables, said: “Having worked with Eclipse since 2018 and seeing their exciting growth, we’re thrilled to be able to make this acquisition and support the team to maintain this momentum.
“The acquisition of Eclipse is part of our strategy to identify and back great management teams that are supporting the energy transition. With ongoing support and investment, our investee businesses will have access to the expertise, business networks and financing to be able to scale faster and help contribute towards the UK’s net-zero goals.
“High-quality management of the distribution networks is going to be critical for the UK, and we are very pleased to be directly supporting the decarbonisation of heat, transport, and industry through this acquisition of Eclipse.”
Gary Gay, Managing Director, Eclipse, added Octopus shares a clear understanding of the important role that electricity distribution networks will play in the UK’s drive towards net-zero, and importance of a customer-focussed approach for building future smart distribution networks.
“With that, we are excited to now be part of the Octopus Group, with this investment helping us to reach the next stage of our growth journey and contribute to a greener, more efficient electricity network in the UK.”
Global renewables updates
ReNew Power recently won a 200MW/ac Interstate Transmission System (ISTS) solar generation project in an auction conducted by the Maharashtra State Electricity Distribution Company. ReNew Power expects to sign a 25-Year Power Purchase Agreement with the utility by the third fiscal quarter of 2022 to supply clean energy to Maharashtra at a tariff of Rs 2.43/ kWh (~US$0.033).
Natel Energy, a supplier of sustainable hydropower solutions, has announced a $20M funding round led by Breakthrough Energy Ventures and supported by Chevron Technology Ventures.
The company will use the funding to deploy its Restoration Hydro Turbine (RHT), which enables cost-effective production of distributed reliable renewable energy.
Duke Energy Florida plans to invest an estimated $1 billion in 10 new solar power plants across Florida, including the construction of four new sites, which will begin in early 2022 and will take approximately 9 to 12 months to complete. Construction of all 10 sites is projected to be finished by late 2024.
LG Electronics has made public its commitment to transition completely to renewable energy by 2050 as a key component of its sustainability strategy.