Siemens CEO praises US policy

Siemens‘ recently-appointed chief executive Joe Kaeser praised the mix of fossil and renewable power sources in the US – while criticising mistakes in Germany’s more radical move from nuclear to renewable energy.

“We are a respected partner in the energy transition 'made in the USA', which distinguishes itself from less well executed approaches in other countries by its hitherto disciplined approach,” Kaeser told shareholders in Munich while presenting results for the company’s first quarter.

The US has taken a very reasonable approach to the restructuring of its energy supply, Kaeser said, with its mix of fossil generation and “new energy sources” that take care of peak demands.

“America shows how you can do this a reasonable way. They have moved away from coal, rather swiftly, towards gas and are blending solar and wind energy to add it to the energy supply mix,” Kaeser said.

“This is how things should have been done in Germany.”

Germany as part of its Energiewende – the move away from nuclear toward renewable power – has handed out support to renewables at a generous level in the past.

At the same time gas and hard coal are pushed out of its wholesale power markets due to a complicated pricing system that favours the entry of renewables, and in part also of lignite – the most polluting form of coal.

Siemens is selling both onshore and offshore wind turbines, and providing offshore grid connections, as well as turbines for fossil power plants. The latter business lately has suffered, with a 15% decrease in revenue in the fourth quarter from a year earlier.

Germany’s support system has fuelled solar panels on consumers' roofs without triggering innovation, Kaeser said, claiming that this has subsidised above all Chinese PV companies. Siemens has exited its solar business after it suffered hundreds of millions of euros in losses.

Kaeser, who took over as CEO in July last year, stressed that there is a need for corrective action to Germany’s energy policy.

“We’re happy that the government starts to discuss the appropriate level of subsidies and the appropriate measures to be taken,” he said.

While “cutting into the existing situation” is needed, the trust of consumers who have invested in solar panels also needs to be respected, he stressed.

“We must be able to cut into existing subsidies, without jeopardising investors’ protection,” he stressed.

Germany’s cabinet has approved the outline of reforms to the country’s Renewable Energies Act (EEG) drafted by energy minister Sigmar Gabriel that spell out steep cuts to support in an attempt to contain energy costs.

Among the cuts are decreases in the support for offshore wind as well as an annual 2.5GW cap to onshore additions, plus further hardship for PV.