Electronics and electrical engineering company Siemens AG (ADR) (NYSE:SI) recently procured an offshore wind project from private developer Cape Wind Associates, LLC for an undisclosed amount. The contract entails Siemens to supply its industry-leading 3.6-megawatt (MW) offshore wind turbines and an offshore Electric Service Platform (ESP) for the first offshore wind farm in the U.S.
Under the terms of the agreement, Siemens will fabricate, install and commission its 3.6-MW offshore wind turbines for Cape Wind. At the same time, the German conglomerate has signed a long-term maintenance contract for the wind turbines and ESP for 15 years. The company will hire local talent for most of its operations and maintenance jobs at Cape Wind’s future service headquarters on Falmouth Harbor on Cape Cod.
In addition to job creation, the project will help catalyze the domestic offshore wind industry and related supply chain by generating environment-friendly energy in the Massachusetts region. This is the first U.S. offshore wind project that has been fully permitted and issued a commercial lease for construction and operations by the U.S. Department of Interior. Cape Wind has sold over two-third of its power output to the two largest electric utilities in Massachusetts – National Grid and NSTAR, under long-term power purchase agreements.
Siemens’ Energy business segment comprises Power Generation (PG), Power Transmission & Distribution (PTD) divisions, Fossil Power Generation, Renewable Energy and Solutions for the Oil and Gas Industry. The PG division offers services and products such as the planning and construction of power plants, the manufacture and installation of components and systems, power plant upgrades, energy management systems, and fuel cells. It also supplies turbines, compressors, and complete solutions for industrial plants, particularly in the oil and gas industry. The PTD Division is a manufacturer, systems integrator and provider of solutions and services for the power utilities and industry customers, which enables utilities to transport and distribute electricity.
Siemens presently has a Zacks Rank #3 (Hold). Other players in the industry worth reckoning includeDaktronics Inc. (DAKT), Garmin Ltd. (GRMN) and Control4 Corporation (CTRL), each carrying a Zacks Rank #2 (Buy).