Siemens to Buy U.K. Tidal Turbine Maker in Next Few Weeks
Siemens AG (SIE), the largest engineering company in Europe, will buy the shares it doesn’t already own in U.K. tidal technology developer Marine Current Turbines Ltd.
Siemens has raised its stake in the Bristol-based company to more than 90 percent from 45 percent and plans to acquire the remaining shares “in the next few weeks,” said Eva-Maria Baumann, a Siemens spokeswoman. The price wasn’t disclosed.
“We’re convinced of the technology and the market potential for tidal energy, especially in the U.K.,” Baumann said today in a phone interview. “Tidal energy is a perfect match for the fluctuating wind energy as you know hundreds of years in advance how the tides will be.”
Energy from the waves and tides has the potential to meet as much as 20 percent of current U.K. electricity demand, according to the government. The country is aiming for 15 percent of its energy to come from renewable sources by 2020. No commercial marine tidal project is operating now.
The turbine maker at the end of 2010 had 3.4 million pounds ($5.4 million) cash and a loss of 675,678 in the year, according to the company’s most recent accounts filed on Sept. 6 on the U.K.’s Companies House website.
Siemens bought the shares from a “large majority” of shareholders, Andrew Tyler, MCT’s chief executive officer, said today by e-mail.
Blow to the U.K.
“The takeover of MCT by Siemens will be seen in the U.K. as a blow to the country’s hopes of building a domestically owned marine energy industry,” said Angus McCrone, senior analyst at London-based researcher Bloomberg New Energy Finance. “MCT has been the frontrunner in the tidal stream sector worldwide in terms of having a project of more than 1-megawatt operating throughout the year and generating electricity.”
“Siemens has taken a view that MCT’s technology could be one of the eventual winners, but there are still plenty of rival firms nursing the hope that their own devices will end up as the industry standard,” he said.
Morgan Stanley (MS) is working with International Power Plc and tidal turbine maker Atlantis Resources Corp. to develop a 400- megawatt project off the coast of Scotland. Rolls-Royce Holdings Plc owns turbine maker Tidal Generation Ltd. DCNS SA, the French engineering company, owns a stake in Irish tidal energy business OpenHydro Group Ltd., and Andritz AG owns a share of Norway’s Hammerfest Stroem SA.
New Energy Finance last year predicted more technology developers will be acquired by bigger companies.
MCT’s SeaGen demonstration project in Northern Ireland has fed more than 3 gigawatt-hours of electricity into the grid since it began operating in 2008, Baumann said. Siemens plans two additional projects totaling 18 megawatts in Scotland and Wales. The company said Oct. 21 it was looking for as much as 100 million pounds for these.
It’s now seeking capital investment from “major companies” with an interest in tidal power projects, Tyler said.
The U.K. and Scottish governments in October increased support for marine energy by proposing to raise the number of so-called Renewable Obligation Certificates to five. This is up from the previous two offered in England and three offered in Scotland and means tidal energy generators may be eligible from 2013 to receive about 229 pounds a megawatt-hour of electricity at current prices. MCT said in April any sale of the company was dependent on U.K. subsidies.
The latest estimates from New Energy Finance show tidal stream power costs about $402 a megawatt-hour. In comparison, coal-fired power costs $57 a megawatt-hour.
To contact the editor responsible for this story: Reed Landberg at firstname.lastname@example.org