Siemens acquires Solel Solar Systems for about $418 million

After  expanding into wind power, Siemens AG is moving into the solar power sector with the acquisition of solar equipment maker for solar thermal power plants, Solel Solar Systems, from its majority shreholder, Londin-based hedge fund, Ecofin Ltd, for about $418 million.

Ecofin owns a 63-per cent stake in Solel on behalf of its funds. The transaction is subject to approval by regulatory authorities and is expected to close before the end of this calendar year.

Solel Solar Systems is one of the two leading global suppliers of solar receivers, which are key components of so-called parabolic trough power plants. It also has solar power generation projects in the US and Spain.

In the US, Solel Inc is developing the 553 MW Mojave Solar Park 1 (MSP-1), the world's largest solar thermal power plant, in California's Mojave Desert to supply power to Pacific Gas and Electric, (PG&E) with whom it had concluded a 25-year power purchase agreement in July 2007.

Solel Inc will build MSP-1 using Solel 6, its solar thermal collector to supply solar electricity from the Mojave Solar Park, spread over nine square miles. It will provide PG&E with 1,388 gigawatts of energy annually at a price competitive with plants powered by fossil fuels.

A report commissioned by the Western Governor's Association predicted that peak power demand by 2015 in the six southwestern states of California, Nevada, Arizona, New Mexico, Colorado and Utah will grow by 34 GW, of which 20 per cent or 7 GW is targeted to be provided through renewable power sources.