Siemens is to further expand its global gas turbine manufacturing network and launched a new joint venture in Russia named Siemens Gas Turbine Technologies. Siemens has a 65 percent stake in the joint venture and its Russian partner Power Machines holds the remaining shares. The joint venture plans to build a new production facility in Russia.
"We intend to invest approximately 275 million euros in our gas turbine site in St. Petersburg and consequently will create 500 jobs in the region. Starting in 2014, advanced, high-efficiency gas turbines are to be produced there for the growth market in the Commonwealth of Independent States (CIS)," said Michael Suess, member of the Managing Board of Siemens AG and CEO of Siemens Energy.
The site will also feature research and development activities in addition to production, service, and sales and marketing. This commitment is part of the plans announced by Siemens to invest one billion euros in Russia and thus create a total of 4000 jobs.
The joint venture can start immediately as the responsible anti-trust authorities have already given their approval. Siemens has already been cooperating successfully in Russia with Power Machines for more than 20 years. The scope of this cooperation extended from the manufacturing and marketing of products and solutions for the construction of new power plants to the maintenance and modernization of these plants. The new joint venture supersedes the current joint venture operating under the name Interturbo, in which Siemens had a minority stake of 45 percent. The new joint venture will benefit from the work the partners have performed in the past: For example, it will provide service operations for the gas turbine fleet installed over the past two decades.
Modernization and expansion of the power plant fleet will be the drivers for the gas turbine market in the CIS region. Siemens expects total power generation in the member countries to increase from today's figure of approximately 1470 terawatt-hours (TWh) by 2 percent annually and thus reach approximately 1800 TWh in 2020. Here, gas-turbine power plants will play a major role: In 2010, power plants operated with gas turbines in the CIS contributed 30 gigawatts (GW) to the combined installed capacity of 370 GW. By 2020, based on Siemens estimates this share will rise to 100 GW.
"As global market leader in advanced gas turbines Siemens will obviously benefit from that. We see Russia and the other CIS member states as a highly attractive market, and we'll play an important role in meeting the increasing power demand in this region. Our products are efficient and therefore both economical and ecofriendly," added Suess. After the U.S., China and Japan, in 2010 Russia was the fourth-largest power generator worldwide.
Above all high-efficiency combined cycle power plants will be of major importance for power generation in the future in the region. In such plants the exhaust gases from the gas turbine are used to drive a steam turbine to enhance the fuel utilization factor. Siemens holds the world record with its H-Class turbine with an efficiency of 60.75 percent, testified at the installation site in Irsching. The average efficiency of thermal power plants operated in the CIS is less than 37 percent and half of them are more than 30 years old. That speaks in favor of their replacement with advanced, significantly more efficient plants. Compared to the gas turbine power plants currently in operation, the latest-generation Siemens gas turbines operated in combined cycle duty with a steam turbine reduce both carbon dioxide (CO2) emissions and gas consumption on average by a third. Compared to coal-fired power plants the reduction of emissions would be significantly higher.
Siemens has been doing business in Russia for almost 160 years. Examples of recent activities include an assembly plant for medium-voltage switchgear in Dubna in the vicinity of Moscow and a joint venture for pipeline compressors headquartered in Perm. Operations were also recently started at a factory for high-voltage products in Voronezh, which is located 500 kilometers south of Moscow. Next year, a transformer factory is to be opened there and a production plant for gas-insulated switchgear is to follow.
Siemens only recently opened a new turbine production facility in Charlotte, North Carolina as a supplement to its established manufacturing plant in Berlin. Both 50- and 60-Hertz gas turbines can be produced in Berlin and Charlotte. This means that the two production facilities can reciprocally meet order peaks. Siemens is also planning a further gas turbine production facility in Saudi Arabia.
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