Siemens and Shanghai Electric have agreed to set up two new joint ventures investing a total of $226 million for the Chinese wind energy market.
Under the terms outlined, Shanghai Electric will transfer all its wind power business to the two joint ventures. Siemens will hold a 49% stake in each of the joint ventures, while Shanghai Electric will have the remaining 51% interest.
The first venture, SmartPower Wind Turbine, will focus on research and production of wind turbine equipment for the Chinese market and for Siemens' global supply network. While the second, Shanghai Electric Wind Energy, will specialize in sales, marketing, project management and other services.
The two companies have been working together for several years in power generation. According a company statement, Shanghai Electric will use Siemens technology as it seeks to develop offshore wind farms "fast and safely" and reach “the peak of the domestic offshore wind- power market."
While Google is embarking on a bold U.S. wind energy project to build an undersea transmission cable stretching about 350 miles from northern New Jersey to southern Virginia, China is already the global leader in wind energy production. Currently producing more than 40 gigawatts (GW) of wind power, the country expects to reach a capacity of 150 GW by 2020.
The joint venture with Shanghai Electric fits squarely in Siemens' longterm energy services strategy.
"Our target is to become one of the world's leading suppliers of wind turbines,"said Michael Suess, member of the Managing Board of Siemens AG and CEO of the Energy Sector. "We see the agreements … as the breakthrough for Siemens in the world's most important wind power market. With the two joint ventures we're now optimally positioned to participate in this strong market."