The Survival of the Power-Tech Dinosaurs
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MSc Program Die approbierteRenewable Originalversion Energy dieser Diplom in-/Master Centralarbeit ist and an der Eastern Europe Hauptbibliothek der Technischen Universität Wien aufgestellt (http://www.ub.tuwien.ac.at). The approved original version of this diploma or master thesis is available at the main library of the Vienna University of Technology (http://www.ub.tuwien.ac.at/englweb/). The Survival of the Power-Tech Dinosaurs A Master’s Thesis submitted for the degree of “Master of Science” supervised by DI Lukas Weißensteiner Mag. Stefan Starnberger, MIM 0151270 November 2011, Vienna Affidavit I, Stefan STARNBERGER, hereby declare 1. that I am the sole author of the present Master Thesis, "The Survival of the Power-Tech Dinosaurs – an analysis how Siemens, GE, Alstom and MHI are performing in the Renewable Energy Market", 137 pages, bound, and that I have not used any source or tool other than those referenced or any other illicit aid or tool, and 2. that I have not prior to this date submitted this Master Thesis as an examination paper in any form in Austria or abroad. Vienna, _______________ ___________________________ Date Signature -- ii-- Für Elisabeth & unsere Kinder Master Thesis MSc Program ‘The Survival of the Power-Tech Dinosaurs’ Renewable Energy in Central & Eastern Europe Mag. Stefan Starnberger, MIM Abstract This paper is dedicated to examining the performance in the renewable electricity generation market of the four most important power technology companies - Siemens, GE, Alstom, and MHI. The key questions that will be answered are: Core questions How did their portfolio and sales development correspond to the 1 trend of increased renewable energy deployment? In how far are they contributing to the current innovation demands 2 for renewable energy sources? How have they adapted their manufacturing and R&D footprints to 3 the global demand shift towards emerging markets in the renewable energy market? Have they been able to transfer their dominance from the fossil 4 power market to the renewable energy sector? The answers to these questions will be given with the help of the analysis framework provided by a Balanced Scorecard. The traditional power technology companies have acknowledged the importance of renewable energy and have transformed their portfolio in the last years and have also managed to transform medium sized local companies into global renewable energy companies. However, Siemens, GE, Alstom and MHI can be seen rather as followers than market changers as the companies have lost significant ground to new players. For the future of our energy system but more importantly for the world’s environmental system, mankind will require these companies to become drivers and not late followers or even burdens for the change towards a reduced or even carbon free economic development. -- ii-- Master Thesis MSc Program ‘The Survival of the Power-Tech Dinosaurs’ Renewable Energy in Central & Eastern Europe Mag. Stefan Starnberger, MIM Table of content Abstract ...................................................................................................................... ii Table of content......................................................................................................... iii List of Tables ..............................................................................................................v List of figures ............................................................................................................ vii 1 Introduction .........................................................................................................1 1.1 Core questions............................................................................................3 1.2 Methodology ...............................................................................................4 1.3 Structure of work.........................................................................................5 2 Renewable Energy Sources................................................................................6 2.1 Wind energy................................................................................................7 2.1.1 Wind energy technology .........................................................................7 2.1.2 On- vs. Offshore .....................................................................................9 2.1.3 Innovation .............................................................................................10 2.2 Solar Power – Concentrating Solar Power (CSP) ....................................13 2.2.1 CSP Technology...................................................................................13 2.2.2 Innovation .............................................................................................16 2.3 Solar Power – Photovoltaic (PV) ..............................................................19 2.3.1 PV Technology .....................................................................................20 2.3.2 Innovation .............................................................................................21 2.4 Hydropower ..............................................................................................23 2.4.1 Hydropower technology ........................................................................23 2.4.2 Innovation .............................................................................................26 2.5 Biomass ....................................................................................................28 2.5.1 Biomass technology..............................................................................29 2.5.2 Innovation .............................................................................................31 3 Company overview............................................................................................34 3.1 Siemens AG..............................................................................................34 3.1.1 Company overview ...............................................................................34 3.1.2 Energy business ...................................................................................36 3.1.3 Renewable energy business.................................................................39 3.1.4 Summary ..............................................................................................43 3.2 General Electric ........................................................................................44 -- iii-- Master Thesis MSc Program ‘The Survival of the Power-Tech Dinosaurs’ Renewable Energy in Central & Eastern Europe Mag. Stefan Starnberger, MIM 3.2.1 Company overview ...............................................................................44 3.2.2 Energy business ...................................................................................46 3.2.3 Renewable energy business.................................................................49 3.2.4 Summary ..............................................................................................54 3.3 ALSTOM ...................................................................................................55 3.3.1 Company overview ...............................................................................55 3.3.2 Energy business ...................................................................................57 3.3.3 Renewable energy business.................................................................59 3.3.4 Summary ..............................................................................................63 3.4 Mitsubishi Heavy Industries (MHI) ............................................................64 3.4.1 Company overview ...............................................................................64 3.4.2 Energy business ...................................................................................65 3.4.3 Renewable energy business.................................................................69 3.4.4 Summary ..............................................................................................72 4 The Renewable BSC.........................................................................................73 4.1 Balanced Scorecard .................................................................................73 4.1.1 Financial ...............................................................................................74 4.1.2 Internal business processes .................................................................76 4.1.3 Learning & Growth – innovation ...........................................................80 4.1.4 Customer ..............................................................................................82 4.2 Balanced Scorecard – results calculation.................................................82 4.2.1 Financial ...............................................................................................82 4.2.2 Internal business processes .................................................................84 4.2.3 Learning & Growth – innovation ...........................................................89 4.2.4 Customer ..............................................................................................93 5 Conclusion ........................................................................................................97 5.1 Renewable BSC conclusion – individual perspective ...............................97