German group reaps rewards of industry cutting consumption

BEIJING - Siemens AG, one of the world's largest engineering conglomerates, is promoting its ideas on saving energy in up to 100 Chinese cities as the nation plans to cut energy consumption in the industrial sector by 16 percent over the next five years.

On July 4, Siemens Ltd China kicked off a countrywide roadshow in Beijing to show off the German company's latest technology in the industrial energy-saving sector. It provides Siemens with the opportunity to demonstrate its products, systems and solutions to the company's Chinese customers.

"As in other industrialized countries, energy efficiency has become a top priority here in China," said Siegfried Russwurm, a managing board member of Siemens AG, and chief executive officer of the company's industry sector. "With our universal energy management we contribute to China's sustainable development and provide solutions to our customers and partners that pay off day by day. The efficiency we design today comes back as the profits of tomorrow."

The output value of China's energy-saving and environmental protection industry is expected to exceed 3 trillion yuan ($468.75 billion) by 2015, 8 percent of the country's total, Securities Daily reported, citing an industry report. The sector's output value was 1.71 trillion yuan by the end of 2009, it said.

The country published guidelines for 10 key emphases on energy saving and emission reduction in the 12th Five-Year Plan (2011-2015) period on July 25, China Securities Journal reported. These included reducing carbon intensity, promoting energy-saving technologies and increasing the scope of low-carbon projects.

Marc Wucherer, president of Siemens AG's industry sector and Siemens North East Asia, applauded the government's measures to improve the energy efficiency of industrial companies. "Siemens is passionate about the environment-related plan that the Chinese government has made," Wucherer said, adding that energy consumption by industry accounts for more than 70 percent of the country's total and, as such, is an important target for savings.

China may face a power crunch of up to 70 million kilowatts (kW) in 2013, Xinhua News Agency reported on Aug 12, citing Wei Shaofeng, deputy director at the China Electricity Council. The estimated power gap over the next year is 50 million kW, the report said.

Wei said the country's power shortage in the coming years could be worse than the situation from 2006 to 2010, when severe power cuts affected some developed regions of the country.

Energy consumption totaled more than 2.2 trillion kW-hours in the first half of this year, up 12.2 percent from a year earlier, said Xinhua's report.

Siemens China business is being boosted by the nation's ambition to tackle energy-wasting issues.

In the second quarter of fiscal year 2011, the company's new orders surged 28 percent to 20.7 billion euros ($34.5 billion), and its revenue climbed 7 percent to 17.7 billion euros. Both results were down to above-average growth in the emerging economies, the report said. During the second quarter of this fiscal year, energy was the fastest-growing sector in the company's major business fields, sealing a record-setting 51 percent increase in order intake.

Total profit doubled in the second quarter to 3.7 billion euros, with the energy sector making the largest contribution, said a Siemens China news release on May 6. The release did not detail how much profit the energy sector made.

Siemens China now has more than 25,000 staff members and 16 research and development facilities. The company had revenue of 5.5 billion euros in the last fiscal year that ended in September 2010.