Siemens AG is one of the world’s largest electronics and electrical engineering companies, with a worldwide presence spanning over 190 countries and annual revenues of over $70 billion. The company invests extensively in R&D, and smart grid is one of the main focuses of its environmental innovation portfolio. Since January 2008, the company has been divided into three sectors: industry, energy and health care (listed in order of size). The energy sector operates in fossil power generation, renewable energy, oil and gas, service rotating equipment, power transmission, and power distribution.
Siemens is one of the smart grid giants, along with ABB, GE and Alstom Grid. It started with a primary focus on distribution automation and grid optimization, but is spreading its presence into the majority of the other submarkets. It offers all the key products, components, software and automation solutions needed to operate smart grids, covering the entire medium-voltage distribution range up to 52 kilovolts, as well as the high-voltage transmission grid. In addition, Siemens develops electric vehicles (EVs) and their infrastructure, including the cars’ electric drives, battery recharge systems and vehicle-to-grid communication (V2G) technology. It also provides solutions for smart metering, demand response and the integration of renewable energy sources and distributed generation.
Being one of the few suppliers that can claim a complete smart grid solution portfolio, Siemens expects an expanding business in the near future. It is also sharpening its focus on non-European growth markets such as China, India and the U.S., aiming to play a major role in their expanding energy infrastructure. Recent acquisitions to strengthen its energy solution portfolio include eMeter in December 2011, power distribution manufacturer Tesla Power & Automation (not to be confused with the electric vehicle manufacturer) in March 2011 and energy management business Site Controls with affiliate company SureGrid in October 2010. Siemens recently announced that it will form a fourth sector -- Infrastructure & Cities -- integrating parts of the Industry sector and the most smart-grid-technology-intense division of the Energy sector, power distribution.
Primary competitors: ABB, GE, Alstom Grid
Analyst Note: Siemens is aggressively expanding its smart grid footprint to take advantage of growth opportunities in North America and elsewhere. Its acquisition of eMeter continues the consolidation trend underway in the sector. The eMeter acquisition makes good business sense, given the growth that Siemens’ Metering and Communications business unit has played in providing professional services to implement this meter data management software. We will be watching Siemens closely for further developments in this area.
A four-way battle for global domination of the smart grid is heating up between Siemens, GE, Alstom Grid and ABB. Of these, Siemens appears to have the upper hand in North American distribution automation, in addition to a strong European presence. Historically strong in distribution grid equipment -- Siemens sources claim some form of its distribution equipment is in use in most major utilities -- the eMeter acquisition is emblematic of its expansion into the AMI side of the business. We would not be surprised to see Siemens take steps to unify the AMI side of smart grid with the distribution automation side, offering a path for IT-OT convergence.
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