PH energy sector seen fueling Siemens’ local growth

Siemens Philippines Inc. is poised for an “exponential growth” over the next five to 10 years, as it targets to grab the lion’s share of the local power generation, transmission and distribution projects currently on the pipeline.

The local unit of the Germany-based Siemens AG expects to ride on the renewed investor confidence on the Aquino administration, which is now offering hefty investment opportunities across all sectors.

The energy sector alone needs a staggering P1.83 trillion in new investments within a 20-year period from 2010 to 2030 to develop not only the country’s fossil fuel and renewable energy sources, but to boost other critical sectors as well.

And Siemens Philippines, as a technology provider, is now looking to play a major role in supporting and in providing green portfolio solutions to the country, with its wide range of products for the whole energy conversion chain – from generation, transmission to distribution of power, all the way down to the end-users, noted Joseph Jorel Nuyda, senior vice president and head of the energy sector at Siemens Philippines.

In an exclusive interview with Inquirer’s SundayBiz, Nuyda explains that as it is, the company already targets as much as a 20 to 30 percent year-on-year growth from its “bread and butter” businesses, which included the upgrading and maintenance services for existing power generation and transmission facilities in the country, among others.

Should all the indicative power projects materialize within the said 20-year period, Siemens Philippines is confident of even further surpassing these growth targets.

Emmanuel G. Gesmundo, Siemens vice president for energy, admits that the renewable energy sector will be a “significant market” for the company over the short- and medium-term. As such, Siemens officials further lauded the government’s initiative to grow by three-fold the existing renewable energy capacity to over 15,000 megawatts from the current 5,000 MW.

Estimates from the Department of Energy showed close to a trillion pesos worth of investments being poured in the renewable energy sector over the next 20 years. These investments will see the construction of renewable energy facilities harnessing either biomass, solar, hydro, ocean or wind, which can generate a combined 9.865.3 megawatts by 2030.

Although a number of the proposed renewable energy projects are still indicative and some, on hold due to the delay in the issuance of the feed-in-tariff rates, Siemens is already in negotiations with several developers, including for three wind farm projects. In one of these projects, Siemens has already been declared as the “preferred tenderer,” Gesmundo discloses.

Nuyda further adds that even the orders for technologies using the traditional fossil-based fuels such as coal remained robust.

“Despite the clamor for renewable energy, we still can’t erase the fact that other developers would prefer coal because of its price competitiveness and (stable generating) capacity. Certain conglomerates are still looking into steam turbine generation, so there remains a big potential there,” Nuyda explains.

Apart from energy, Siemens Philippines also expects its other business segments to help shore up the company’s market share, including in industry and healthcare.

More specifically, Siemens officials note that they can also provide customers with a broad range of the latest green technologies for infrastructure and cities, manufacturing, waste and wastewater, urban development, sustainable energy efficiency solutions, electric mobility and smart grid, among others.

Siemens has been in the Philippines for more than a hundred years, holding leading positions in the energy, healthcare and industry sectors. During fiscal year 2010 (Oct.1, 2009 to Sept. 30, 2010), sales in the country reached 141 million euros or some P8.6 billion while new orders reached 681 million euros or some P41.54 billion. Siemens currently has 166 employees in the country.