China Tabs Siemens as Partner on Gas Turbines

Siemens on July 9 said it has a memorandum of understanding (MOU) to work with China’s State Power Investment Corporation (SPIC) on heavy-duty gas turbines. Siemens said it will support SPIC’s research and development of the turbines and provide training and technical consultation.

“The signing today will expedite finalization of a technology cooperation agreement in the near future,” Siemens said in a statement Monday.

The deal was one of several inked between German companies and China as Prime Minister Li Keqiang and German Chancellor Angela Merkel met in Berlin. Siemens said it also signed an MOU with Alibaba Cloud, the cloud computing arm of Alibaba Group, to partner to foster the industrial Internet of Things (IIoT) in China.

The turbine deal is important for Siemens, which like other manufacturers of large gas turbines— including General Electric and Mitsubishi Hitachi Power Systems—has struggled with falling demand for the units as power companies move away from fossil fuel-fired generation and embrace renewable energy resources. Siemens recently said profit from its Power & Gas division dropped by 74% year-over-year in the second quarter.

Siemens’ CEO Joe Kaeser in June said reports the company might sell its turbines business were just “media speculation.”

Though Siemens, GE, and MHPS all have reshuffled their businesses over the past two years, MHPS has trumpeted the news it overtook its two rivals in global orders for new turbines in the first quarter of 2018. A report from Barclays Plc said MHPS received more than half all global orders for gas turbines during that three-month period, the company’s best-ever performance.

Darrell Proctor is a POWER associate editor (@DarrellProctor1, @POWERmagazine).