Siemens Acquires Solar Thermal Leader Solel for $418 Million

Siemens acquires Israel’s Solel Solar

Financial Times - By Daniel Schäfer in Frankfurt and Fiona Harvey in London



Siemens on Thursday said it would take over Israel’s Solel Solar Systems, in a deal that will give Europe’s largest engineering group a leading position in the fledgling market for concentrated solar power.

The German industrial conglomerate on Thursday acquired Solel Solar for $418m after it won a bidding battle with French rivals Areva and Alstom.

Peter Löscher, Siemens’ chief executive, said the group, which has positioned itself as the “green infrastructure giant” in recent years, aimed to replicate its successful foray into the wind sector five years ago.

Siemens acquired wind power company Bonus Energy for €400m ($598m) in 2004. Since then, Bonus has lifted its revenues almost tenfold to more than €2bn.

“We aim to be the global market leader in the solar thermal sector,” Mr Löscher said.

Solel Solar is one of the two largest makers in the world of solar receivers, and it also builds full-scale concentrated solar power (CSP) plants.

The company has doubled its revenues to almost $90m in the first half of the year. Its previous majority-owner was Ecofin Limited, a London based investment firm.

Siemens also has a stake in Italian CSP company Archimede Solar Energy, which it acquired earlier this year.

Its foray into the fast-growing market followed moves by other German industrial groups such as Bosch into the solar panel business. Bosch has been criticised for overpaying after it bought Ersol, the solar energy company, for more than €1bn last year.

The market for solar panels is seen as overcrowded after Chinese producers have started to flood the market with low-cost products.

But the market for concentrated solar power, also sometimes called concentrated solar thermal power, is one of the brightest spots in the solar market.

CSP uses technology similar to that of conventional fossil fuel power plants. An array of mirrors is angled so as to concentrate the rays of the sun on to a vat containing water, which turns to steam under the heat and drives a turbine. This is both cheaper than solar panels and can be used on a bigger scale.

Siemens estimates that this market will grow at double digit rates in the next ten years and will reach a volume of €20bn by 2020.

Several large scale projects have recently been announced, such as an array of plants in the Indian state of Gujarat, which would have a generating capacity of 3GW and would cost $10bn to build.

Siemens is part of a consortium – called Desertec – that aims to supply up to 15 per cent of Europe’s energy needs by 2050 through thermal and other renewable energy plants in the deserts of North Africa and the Middle East.

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