Siemens to quit the nuclear power business

22 September 2011

The CEO of German energy industry giant Siemens, Peter Löscher, has publicly stated that the company will withdraw its remaining nuclear power offerings and leave the industry. His announcment came during an interview with German newspaper Der Spiegel. Siemens played a major part in the expanding nuclear deployment of the 1970s and 1980s. The Kraftwerk Union technology became part of the entire German nuclear fleet, while reactors were also exported to Argentina (Atucha 2), the Netherlands (Borssele), Switzerland (Goesgen) and Spain (Trillo 1).

Mr Löscher said the company was influenced by the Fukushima accident and its impact on the German political situation. But alongside these issues, and their effects on utilities' maintenance plans, Siemens had already been restructuring and reducing its specialist nuclear businesses for several years, he said, principally through the merger of its reactor business with that of France’s Framatome in 2001, which it pulled out of in 2009 leaving the company’s owner Areva with full ownership and control.

Siemens said it left the Areva partnership to improve its ‘entrepreneurial manoeuverability’. Within one week of the split Löscher had met Russian prime minister Vladimir Putin to discuss a ‘large-scale partnership’ with Rosatom. However, little nothing concrete developed following the visit.

Part of Siemens' nuclear business strategy was to remain as a specialist provider for the 'conventional island' of new nuclear power plants, as well as a provider of safety-critical instrumentation and control systems for new reactors, and it is these main areas that now stand to be discontinued.

In general reactor vendors offer the 'nuclear island' of a power plant – the nuclear steam supply system for the reactor vessel, pumps, pipes, steam generation and control systems. Until now Siemens has offered parts and services for the 'conventional island' – the steam turbine, generator and cooling water systems. Siemens would provide single components, or, as is the case at Olkiluoto 3, the entire conventional island on a turnkey basis. It also bid jointly with Areva to provide instrumentation and control for Bulgaria's Belene project.

Reactor vendors mostly tender with a regular partner or have an internal arrangement for conventional island work. For example Areva usually pairs with Alstom, while GE and Hitachi can self-supply, as can MHI. Westinghouse can work with a range of suppliers, including owner Toshiba, while Russia's Rosatom and South Korea's Kepco have so far offered turnkey products from domestic suppliers. Siemens has been left without a clear partner for nuclear build projects. A further complication is that it signed a four-year 'non-compete' clause signed with Areva as part of the pull-out, although this is under investigation by the European Commission. In the meantime, Rosatom has announced its intention to collaborate with Rolls-Royce, although there have been no commitments to joint projects yet.

Siemens will continue to offer steam turbines, generators, control systems and the various other components for use in thermal power plants, including nuclear ones, but without the major involvement in nuclear power specifically. In Mr Löscher's words "We will continue to provide components such as conventional steam turbines, but we will limit ourselves to technologies that are also used in natural gas-fired or coal-fired power plants and not exclusive to nuclear power plants. We will not accept any new contracts to finance or act as general contractor in the construction of nuclear power plants. That chapter is closed for us."




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