June 28, 2008

Siemens Power to Put Solid-Oxide Fuel Unit on Block

By Thomas Olson, The Pittsburgh Tribune-Review

Jun. 28--Siemens Power Generation Inc. said Friday it's putting its solid-oxide fuel cell unit on the selling block after running it 10 years because the business in Churchill won't hit Siemens' profit targets.

The business employs about 130 people in George Westinghouse Research & Technology Park. Siemens acquired the operation from the former Westinghouse Electric Corp. for $1.53 billion in 1998.

The "for sale" notice marks Siemens' second retreat from fuel cells here. The company in 2004 dropped plans to develop a solid-oxide fuel cell plant in Munhall that had been in the works since 2001.

In a statement yesterday, Siemens said the business is "not a core competency for its energy business." The company had invested in development of the technology for many years but now finds the time frame to bring the cutting-edge technology to commercialization does not fit its mandate to reach "target profit ranges by 2010."

Westinghouse, along with the Department of Energy, invested a combined $150 million to develop the technology in the 1980s and early 1990s. Similarly, Siemens has been researching the technology in tandem with the Energy Department.

The solid-oxide variety is one of several types of fuel cells, which for decades have been viewed as a highly efficient, environmentally friendly alternative for generating power.

The solid-oxide fuel cell is a specially coated rod made of ceramic materials that chemically converts gaseous fuel -- usually natural gas -- directly into electric energy. It has no moving parts and emits virtually no pollutants.

Siemens Power Generation, based in Orlando, Fla., said it hopes to find a buyer which would be able to "bring the technology to its full commercialization."

"We continue to believe that fuel cell technology is extremely promising as an alternative green source of electricity," said Siemens' statement.

Siemens employs about 1,070 at five locations in the Pittsburgh region, including the Environmental Systems and Services business, which employs about 500 workers Downtown.


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