(EnergyAsia, October 6 2011, Thursday) — In a major blow to the nuclear lobby, German industrial and engineering giant Siemens said it is quitting the business of managing, building or financing nuclear plants.
In an interview with the Der Spiegel newspaper, the company’s President and CEO, Peter Loescher, said Siemens is exiting the business as a result of the “the clear positioning of German society” calling for the end of nuclear energy.
Germany was the first major country in the world to announce its decision to quit nuclear energy following the earthquake-tsunami tragedy of March 11 in Japan. The giant Fukushima Daiichi plant in northeastern Japan continues to leak radiation after it was destroyed by a 9-richter quake that was followed by a tsunami.
Mr Loescher said Siemens will focus on supplying only conventional equipment such as steam turbines for use in power plants fired by traditional fossil fuels such as oil, gas and coal.
As a global player in nuclear plant engineering, Siemens’ decision will weigh heavily on the nuclear lobby’s insistence that atomic energy can be made safe in the aftermath of the Fukushima tragedy. The government of Chancellor Angela Merkel moved decisively and quickly by setting 2022 as its deadline to abandon nuclear power, which provided 23% of the country’s electricity, by 2022.
The Japanese government is also under pressure to abandon nuclear energy, which provided 29% of the country’s electricity last year.
Following Mr Loescher’s interview, Siemens announced it had restructured its operations with the set-up of a new “Infrastructure & Cities” sector on October 1.
The sector will aim to be “a leading participant in the dynamic growth of cities and infrastructure investments” around the world.
Mr Loescher said: “We are rigorously focusing our business on growth. Our new setup will put us even closer to our customers. The Infrastructure & Cities sector will open up additional business opportunities in the growth market of cities.”
Roland Busch, CEO of the Infrastructure & Cities Sector, said: “Cities face the enormous challenge of reconciling urban growth with a good quality of life. We can offer them comprehensive solutions from one hand to achieve this. In order to better serve the needs of cities, we are focusing the new Sector specifically on cities and infrastructure.”
Siemens said that more than half the world’s population lives in cities today; by 2032, it will climb to 60% for an increase of 1.4 billion urban residents.
In response to this growth, cities throughout the world will have to massively invest in expanding their infrastructures.
Siemens, which claims to offer the world’s broadest and most comprehensive portfolio for urban infrastructures, estimates that the market for urban investments currently totals 300 billion euro a year.
From Munich in Germany, the new sector will offer and manage its cities solutions for mobility, environmental protection and energy saving. With around 87,000 employees, the sector will host the Mobility and Building Technology division from the Industry Sector, and the Power Distribution division and Smart Grid division from the Energy Sector.
Infrastructure & Cities will comprise five divisions: Rail Systems (rail vehicles), Mobility and Logistics (traffic, transport and logistics management), Low and Medium Voltage, Smart Grid (intelligent power grids) and Building Technologies. Under this new setup, the divisions can better focus on their respective businesses and target markets to develop business opportunities in the growth market of cities.
To take advantage of this growth market, Siemens said it will employ a new approach for sales as well as for research and development in its urban business. Its centres of competence, in which Siemens will bundle its expertise for urban infrastructures, are an important element in this strategy.
The first centre is being built in London with two others now planned for Asia and the US.
Siemens said its experts will conduct research for new urban solutions and tailor special packages of products for urban planners and mayors. These include integrated traffic solutions for preventing congestion as well as innovative concepts for reducing power consumption.
In times of limited public budgets, Siemens said its solutions, such as Energy-Saving Contracting, help cities and communities cut costs and improve their environmental protection balance. Moreover, Siemens solutions like traffic tolling systems offer cities and communities new sources of income.