Siemens expects to boost cleantech revenues

Munich, Germany-based Siemens (NYSE: SI), one of the largest electronics and industrial engineering firms in the world, says that sales from its environmentally friendly products and services are on the rise.

At an event in London, Siemens president and CEO Peter Loescher announced that the company expects to generate €25 billion in revenues in 2011 from its ecofriendly products and solutions.

In 2007, the company had €17 billion in cleantech revenues, accounting for almost one-quarter of Siemens' overall revenues last year.

"This is organic growth based on our current portfolio," said Loescher. "So there's no acquisitions whatsoever included in this."

But he said there would be a boost in the amount of money spent on research and development, up from the current €850 million.

"As we increase the share of this portfolio, for sure we will also intensify our research and development efforts."

Siemens said the current 2011 target equals a 10 percent annual growth of its cleantech portfolio.

The company's environmental portfolio spans a wide range of industries, including power generation, transmission and consumption; buildings, lighting, transportation and industry; as well as water purification and air pollution controls.

Earlier this month, Siemens' energy arm announced plans to establish its first U.S. wind turbine research and development competence center in Boulder, Colo. (see Siemens to build R&D wind turbine center in Colorado).

Take a look at some of Siemens' turbines here >>

Siemens currently has core competency centers for wind turbine R&D in Copenhagen, Denmark; Aachen, Germany; Delft, Netherlands, and Keele, England.

The company also just announced plans to build a second plant in Elgin, Ill., for the production of wind turbine gears. The new facility is expected to cost $20 million and be complete by March 2009.

And the company's water technologies unit was recently awarded a $3 million research grant from Singapore's Environment and Water Industry Development Council for the development of advanced desalination technology.

The company plans to work on a seawater desalination system which it said could cut energy consumption by at least 50 percent compared to existing technology.

Siemens plans to develop the technology at its Singapore-based global R&D center.

"Energy consumption worldwide is expected to double by 2030," said Loescher. "However, we believe that curbing economic growth and lowering people's standard of living is not an option."

"So the challenge is to maintain high living standards and strong economic growth, while minimizing the negative impacts on our environment."

In fiscal 2007, Siemens said that products and solutions from its environmental portfolio reduced customers' carbon dioxide emissions by 114 million tons.

In 2011, the company expects the carbon dioxide savings achieved with its products and solutions to total approximately 275 million tons, an amount equal to the current CO2 emissions of six major cities, including London, New York and Tokyo.

To qualify for inclusion in its cleantech portfolio calculations, Siemens said a product had to reduce greenhouse gas emissions or, as an environmental technology, help combat water and air pollution.

Siemens said that all of its products in the area of renewable energy, including the 7,000 wind turbines, with a total output of nearly 7,000 megawatts, that the company has installed, meet the criterion to be included in its environmental portfolio.

The company said that the turbines that it supplies to solar-thermal power plants are also included in its porfolio of ecofriendly products and solutions.

Siemens said light emitting diodes and energy saving lamps are another example, with the company saying the technologies make a significant contribution to CO2 savings by consuming considerably less electricity than conventional lighting systems.

Solutions for modernizing old power plants are also included in its environmental portfolio since Siemens said increasing plant efficiency substantially reduces CO2 emissions at a relatively low cost.

"There's hardly any other business where you have an immediate payback," Loescher said of CO2 emissions reduction.

"I think we will continue to see a rising awareness of the issue. We will see an increased focus from the policymakers around the world, and I'm also sure that we will work towards a post-Kyoto framework."

Loescher said from a customer perspective, it just makes economic sense to invest in these technologies.

"I personally believe this will be a growing demand going forward, even in a slowing down world economy."