- Siemens Energy AG has decided not to tender for coal based power projects anymore
- The spin-off of entity of German power sector conglomerate Siemens AG is obliged to progressively reduce its carbon footprint
- The company listed on the Frankfurt Stock Exchange on 28 September 2020 and started trading at 22.01 euros per share which valued the company at $18.6 billion.
Siemens Energy AG (LON: 0SEA), the newly spun-off business of German power sector conglomerate Siemens AG, has decided not to tender for coal based power projects anymore. This is keeping in line with the company’s commitment to cut down its exposure to carbon emitting power businesses and progressively move towards renewable energy businesses.
The decision of the company is also in line with European Union’s long-term objective to become carbon neutral by the year 2050, under which it requires all countries and businesses under its jurisdictions to make requisite contributions. The company is one of the largest global suppliers of wind turbines, gas turbines and steam turbines and distributes its equipment in all parts of the world.
Coal-based power tenders
Most countries and businesses in Europe have made some pledge towards reducing their carbon footprints over time. Most energy utility businesses across the continent have also announced to limit their energy sourcing from coal based and other high carbon-emitting sources.
It is thus expected that overtime the demand for coal based power plants would come down not only in Europe but in the rest of the continents as well. Thus, Siemens Energy’s decision to realign its business to adapt to the changing business environment is apt and is expected to derive value for its shareholders.
Siemens Energy AG
Siemens Energy AG is a spun-off unit from Siemens AG on 1 April 2020. After the Spin-off Siemens AG announced that it will be giving off 55 per cent of its stake in the new company to its existing shareholders. Siemens gave one share of Siemens Energy to the shareholders who held two shares in the parent company. After the transaction, the shareholders of Siemens become 55 per cent owners of Siemens Energy while the parent company retained the rest.
The company came out with its IPO later in September on the Frankfurt Stock Exchange and on 28 September 2020 started trading at 22.01 euros per share which valued the company at $18.6 billion. After the IPO transaction, Siemens AG now owns 45 per cent shareholdings in Siemens Energy, while other shareholders hold 55 per cent stake in the company.
The thrust for renewable energy in Europe
The European Union has an ambition of making itself climate-neutral by the year 2050. In order to fulfil that objective, it has set out a time bound goals for all member countries to reduce their carbon footprint. The Union has also taken progressive measures like providing tax breaks for non-polluting industries and processes while imposing punitive taxes in high carbon-emitting processes.
Siemens Energy secures a contract of distribution transformers from MHI Vestas
Recently, MHI Vestas Offshore Wind has entrusted Siemens Energy to supply the Seagreen Offshore Wind Farm with distribution transformers and is located 27 kilometres away from the coastline of Angus, UK.
The 1.075GW Seagreen Offshore Wind Farm will be supplied with 114 low-loss 66kV fluid immersed distribution transformers by Siemens Energy.
Siemens Energy stated that the transformers were designed in such a way that they meet high-efficiency requirements. They are filled with safe and biodegradable insulation fluid, which will prove to be an environmentally friendly alternative to mineral oil.