Hitachi, Mitsubishi and Siemens Consider Joint Alstom Bid
Hitachi Ltd. plans to partner with Mitsubishi Heavy Industries and Siemens in a bid to acquire French multinational company Alstom’s energy business. MHI and Siemens are currently deciding whether to submit a joint proposal to Alstom that would rival a $17 billion bid from GE.
Longtime partners Hitachi and Mistubishi Heavy—both based in Japan—are considering offering $5 billion for Alstom’s steam turbine assets, while Siemens may match that for Alstom’s gas turbine division. Alstom’s steam turbines account for more than twenty percent of global installed capacity, and more than 30 percent of nuclear power stations currently use them. There was no indication that the proposal would include Alstom’s wind turbine business.
In May, Mitsubishi Heavy President Shunichi Miyanagi expressed the company’s interest in accelerating its global expansion through mergers, acquisitions and alliances. The company and its potential partner could certainly benefit from access to Alstom’s clients throughout Europe. Neither Mitsubishi Heavy nor Hitachi Ltd. currently have much presence in the region and intend to sell other technologies such as clean-coal power stations and nuclear equipment.
Mitsubishi Heavy has been paying down debt and cut its debt equity ratio in half between 2010 and 2013 while increasing its cash reserves to nearly $4 billion. The deal follows a major reorganization for the company that involved the consolidation of nine business divisions into four domains for the business year that began in April.
The potential acquisition is in alignment with Japanese Prime Minister Shinzo Abe’s call for more exports of Japanese coal technology and nuclear equipment to increase growth. Abe has often lauded Japan’s ability to build increasingly efficient coal plants that help reduce emissions, including technology that was developed by Mitsubishi Heavy. As Japan distances itself from atomic energy following the Fukushima disaster in 2011, Abe is also pushing for domestic companies to build their first nuclear plant overseas.
Hitachi is currently planning the construction of new nuclear reactors in the United Kingdom after buying the Horizon Nuclear Power project from E.On and RWE. The project involves the construction of two to three 1,350 MWe Advanced Boiling Water Reactors and is currently being assessed by the Office for Nuclear Regulation.
In a separate deal, Siemens is also proposing to combine its rail activities with Alstom's. The French government has actively lobbied for the deal, saying it would create a European rail champion.
Major move forward for UK’s nascent marine energy sector
Although the industry is small and the technologies are limited, marine-based energy systems look to be taking off as “the world’s most powerful tidal turbine” begins grid-connected power generation at the European Marine Energy Centre.
At around 74 metres long, the turbine single-handedly holds the potential to supply the annual electricity demand to approximately 2,000 homes within the UK and offset 2,200 tonnes of CO2 per year.
Orbital Marine Power, a privately held Scottish-based company, announced the turbine is set to operate for around 15 years in the waters surrounding Orkney, Scotland, where the 2-megawatt O2 turbine weighing around 680 metric tons will be linked to a local on-land electricity network via a subsea cable.
How optimistic is the outlook for the UK’s turbine bid?
Described as a “major milestone for O2” by CEO of Orbital Marine Power Andrew Scott, the turbine will also supply additional power to generate ‘green hydrogen’ through the use of a land-based electrolyser in the hopes it will demonstrate the “decarbonisation of wider energy requirements.”
“Our vision is that this project is the trigger to the harnessing of tidal stream resources around the world to play a role in tackling climate change whilst creating a new, low-carbon industrial sector,” says Scott in a statement.
The Scottish Government has awarded £3.4 million through the Saltire Tidal Energy Challenge Fund to support the project’s construction, while public lenders also contributed to the financial requirements of the tidal turbine through the ethical investment platform Abundance Investment.
“The deployment of Orbital Marine Power’s O2, the world’s most powerful tidal turbine, is a proud moment for Scotland and a significant milestone in our journey to net zero,” says Michael Matheson, the Cabinet Secretary for Net-Zero, Energy and Transport for the Scottish Government.
“With our abundant natural resources, expertise and ambition, Scotland is ideally placed to harness the enormous global market for marine energy whilst helping deliver a net-zero economy.
“That’s why the Scottish Government has consistently supported the marine energy sector for over 10 years.”
However, Orbital Marine CEO Scott believes there’s potential to commercialise the technology being used in the project with the prospect of working towards more efficient and advanced marine energy projects in the future.
“We believe pioneering our vision in the UK can deliver on a broad spectrum of political initiatives across net-zero, levelling up and building back better at the same time as demonstrating global leadership in the area of low carbon innovation that is essential to creating a more sustainable future for the generations to come.”
The UK’s growing marine energy endeavours
This latest tidal turbine project isn’t a first for marine energy in the UK. The Port of London Authority permitted the River Thames to become a temporary home for trials into tidal energy technology and, more recently, a research project spanning the course of a year is set to focus on the potential tidal, wave, and floating wind technology holds for the future efficiency of renewable energy. The research is due to take place off of the Southwest coast of England on the Isles of Scilly