Siemens AG will exit the solar business and concentrate its renewable energy interests in wind and hydro, the company announced on Oct. 22.
The German conglomerate, with worldwide revenues of 72.5bn euros, is exiting the solar thermal business, which is a bit player in its energy portfolio.
The solar business is a tiny part of the company, producing revenue the last quarter was about $390m.
The company does not compete in the solar photovoltaic industry, which has undergone upheaval worldwide over the past two years, with industry players confronted by declining process, manufacturing overcapacity and a brewing trade war.
Rather, Siemens is active in the solar thermal energy industry, which uses sunlight to heat a fluid, which is then used to spin turbines to create electricity.
Siemens said it is already holding talks with potential buyers.
“Strengthening the company’s focus on core activities is one of the five main points of the new company program 2014, the broad outline of which was recently announced to the public,” Siemens said. And those activities are in wind and hydropower, where it is already an established presence.
“The global market for concentrated solar power has shrunk from four gigawatts to slightly more than one gigawatt today. In this environment, specialized companies will be able to maximize their strengths,” said Michael Süß, member of the Managing Board of Siemens AG and CEO of the Energy Sector.
Siemens will provide products for solar thermal and photovoltaic power plants, such as steam turbines, generators, grid technology and control systems.
The company said it expects global power consumption will rise from 22,100 TWh to 37,100 TWh in 2030, with renewables contributing 28% of the global power mix in 2030.
“The importance of renewable energies in the global power mix will continue to grow and hydro power and wind energy will remain the major renewable contributors,” the company said. It is one of a handful of large participants for offshore wind power farms and it is in the top five globally in onshore wind.
Siemens is now testing a 6-MW offshore wind turbine with the largest rotor in the world, featuring blades that are 75 meters in length.
According to the company’s web site, Siemens has been active in the solar industry as early as the 1950s. But that will come to an end soon.