Global energy technology giant Siemens plans to acquire Massachusetts-based Russelectric, a move likely to strengthen Siemens position in state’s increasingly fertile microgrid market.
Russelectric manufactures power control systems and made a splash in the microgrid arena last year with the opening of a sophisticated microgrid demonstration at its Hingham, Massachusetts headquarters.
The Russelectric microgrid not only powers the facility, but also serves as a learning ground for potential customers who want to see a microgrid in action. Such projects are viewed as valuable within an industry that is still young and needs to prove itself to customers
The acquisition of Russelectric by Siemens means that two of the major players in microgrids — Siemens and Schneider Electric — will have corporate demonstration projects in Massachusetts. Schneider Electric, a prime competitor to Siemens, operates a demonstration microgrid at its Andover, Massachusetts headquarters.
Like most of the Northeast, Massachusetts is viewed as a prime market and a launching ground for the North American industry because of severe hurricanes and winter storms that cause power outages. (The other launching ground for microgrids is California, where the market has been driven by environmental goals and grid vulnerability to earthquakes and wildfires.)
State policy swings in favor of microgrids in Massachusetts with state grant programs through the Massachusetts Clean Energy Center and strong energy storage, renewable energy and climate goals. The city of Boston also has laid out microgrid plans, with a much-watched project at the Raymond L. Flynn Marine Park Project.
In addition, like much of the Northeast, Massachusetts struggles with high electricity rates, so seeks alternatives like microgrids that may bring down costs.
However, Siemens acquisition of Russelectric isn’t just about microgrids.
Barry Powell, vice president and business unit head, Siemens Low Voltage & Products, North America, said that the acquisition brings together “Siemens’ expertise and experience in the low voltage power market with Russelectric’s complementary high-quality energy infrastructure portfolio to provide technologies that ensure these critical installations receive uninterrupted, secure power.”
Russelectric supplies such equipment as low- and medium-voltage power control systems, SCADA and switchgear and automatic transfer switches to data centers, hospitals, banks, airports, the military and similar commercial, industrial and institutional energy customers.
Started as an independent, family-owned business in 1955, Russelectric now has 400 employees and has expanded its reach globally; its equipment can be found in many Fortune 1000 company facilities. In addition to its Massachusetts headquarters and manufacturing facility, Russelectric operates a manufacturing plant in Broken Arrow, Oklahoma.
Andreas Matthé, Global CEO of Siemens Low Voltage & Products said that the two organizations share complementary portfolios and together can “create additional value for customers through an experienced workforce, extensive domain knowledge and complementary sales approach.”
Dorian Alexandrescu, Russelectric president and CEO, added that the company built its reputation over the years “on highly engineered solutions of top-quality products and an always-take-care-of-the-customer mindset. Those were the guiding values instilled by our founder, Raymond G. Russell, and these are the same values that we saw in Siemens.”
Terms of the transactions were not disclosed. Siemens anticipates that the deal will close in late 2018 or early 2019, after which Russelectric will be known as “Russelectric, A Siemens Business.”
With 377,000 employees in 190 countries, Siemens reported worldwide revenue of $92.0 billion in fiscal 2017. Revenue for its US operation was $23.3 billion, including $5.0 billion in exports. Siemens employs about 50,000 people in the 50 US states and Puerto Rico.
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