Siemens Sells Tidal Unit to Atlantis as Market Too Slow to Grow

(Bloomberg) — Siemens AG sold its tidal-power unit to
Atlantis Resources Ltd. after losing faith in an industry it
said was taking too long to grow.

Turbine maker Atlantis takes ownership of the unit’s six
projects, the Singapore-based company said Wednesday in an e-mailed statement, without disclosing financial terms. Siemens
acquires a 10 percent stake in Atlantis as part of the deal.

Siemens was one of the first large industrial companies to
enter the sea-energy industry, buying Marine Current Turbines
Ltd. in February 2012. As other renewable technologies such as
solar and wind have cut costs to become commercially viable,
tidal and wave projects remain the most expensive sources of
power at four times the cost of coal, Bloomberg estimates show.

“Siemens has had to settle for shares in Atlantis worth
2.5 million pounds ($3.8 million) at today’s price, for a
business that it bought in 2010-12 for an estimated 20 million
pounds,” said Angus McCrone, a senior analyst at Bloomberg New
Energy Finance. “The German company may not retain its stake in
Atlantis for long, unless it suddenly becomes more positive
about prospects for tidal stream.”

Siemens, based in Munich, said the sale of MCT was part of
“portfolio optimization,” according to an e-mailed statement.
“Siemens and Atlantis have agreed to explore respective
opportunities for the future,” it said.

MCT’s projects in Wales, Northern Ireland and southern
England will expand Atlantis’s potential installed capacity to
almost 600 megawatts, making it one of the largest marine-energy
companies in the world. The manufacturer will set up a turbine
plant in Scotland as part of the acquisition.

While the U.K. has said wave and tidal energy have the
potential to deliver about a fifth of its current electricity
needs, Siemens decided last year it would sell MCT saying the
market and supply chain were taking too long to grow.

Last August, Bloomberg New Energy Finance revised its
outlook for global tidal-stream power capacity in 2020, cutting
its forecast by 11 percent to 148 megawatts.

To contact the reporter on this story:
Louise Downing in London at
ldowning4@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Amanda Jordan, Ana Monteiro

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