Siemens Energy: Spinning-off Climate Crisis

With its upcoming listing on the Frankfurt stock exchange in late September, the Siemens Energy Spin-off will add risky fossil assets to its future investors‘ portfolios. As NGO experts from Israel, Indonesia and Germany have highlighted during a digital press conference today, one day before Siemens Energy’s Capital Market Day, the company will rely heavily on climate-damaging activities like gas- and coal-fired power plants.

On its website, Siemens Energy states: “We can contribute to fighting climate change by making sustainable, reliable, and affordable energy possible.” [1] For the company this includes fossil energy sources as well as renewables. Even the announcement of ending its coal business from July [2] will not stop its climate-damaging coal activities in the near future, let alone other fossil activities.

Regine Richter, Energy Campaigner at Urgewald, commented: “The best contribution to fighting climate change is to end all projects that will lead to additional use of coal, oil and gas. As countries around the world will raise their renewables ambitions in the coming years, long-term fossil investments are not only damaging for the climate, but also for Siemens Energy’s shareholders. The company clearly still wants to profit from fossil businesses, rather than coming up with a clear strategy for getting out of fossil fuels.”

As research by the NGO EcoPeace Middle East shows, Siemens is one of three shareholders in a planned gas-fired power plant called ‘Eastern Station’ or ‘Reindeer Plant’ in Israel, which is supposed to be constructed close to the green line that divides the Palestinian West Bank from Israel. With a capacity of up to 1,300 megawatts, it would be Israel’s biggest privately-owned power plant. (For details, follow the link to EcoPeace Middle East’s Briefing Note.[3])

The project has been pushed forward even though 14 Israeli municipalities as well as the Palestinian municipalities of Qalqilya and Habla filed objections against it. The municipalities are worried about the health impacts of the power plant’s exhaust gases. There are also major concerns about the risks for the sensitive water supply of this region: since the plant is supposed to partly run with diesel fuel, the storage of large amounts of diesel creates high risks of water pollution. 

Various obstacles, mainly related to last minute notification of the hearing date, prevented the proper and due process for municipalities and residents to present their objections. Palestinian mayors were given such short notice that they could not arrange the required military permit to enter Israel and therefore for all practical purposes were prevented from appearing before the responsible committee.

The project is also contrary to Israeli national and global climate commitments by furthering CO2 emissions. This is also why Israel’s Environment Minister Gila Gamliel and the Head of the Israeli Knesset Environment Committee Miki Haimovitch have declared their opposition to any new fossil-fueled energy production in Israel. [4]

Gidon Bromberg, Israeli Director of EcoPeace Middle East, said: “The Siemens project has managed to unify all nearby Israeli and Palestinian communities in a common objection to the building of a new fossil plant. This is not an issue of ‘Not in my backyard’. In a part of the world blessed with over 300 days of sunshine, photovoltaic power production is today cheaper than natural gas, produces clean energy with no risk to public health and the environment and puts Israel on track to better meet Paris climate commitments. The new power plant proposed is not about replacing coal but about meeting new electricity demand. Siemens is welcomed to invest in renewable energy but investing in new fossil plants in Israel constitutes irresponsible behavior.”

Siemens is also involved in the planned coal-fired power project Jawa 9 and 10 in Indonesia, close to the country’s capital Jakarta. Siemens is set to provide equipment for the coal-fired power plant, which is supposed to run with a capacity of 2,000 megawatts. While Siemens announced a coal phase-out in July, Siemens Energy insists that the company has contracts it has to serve and will fulfill.

The numerous power plants already operating in this region of Jawa are one of the main reasons why the air quality in Jakarta is among the worst in the world. In 2019, a group of 31 plaintiffs filed a lawsuit seeking better standards across the sectors causing the pollution – including coal power. [5]

Modelling of health impacts has estimated that Jawa 9 and 10 will cause over 4,700 premature deaths over its operating lifetime. [6] Local organizations filed an objection notice and are preparing a lawsuit about the project’s permit be-cause it is not in line with environmental protection standards. [7]

Given the possibility that most of the produced electricity by Jawa 9 and 10 may not be used, these additional harms would be especially egregious. The Jawa-Bali grid, where the proposed Jawa 9 and 10 coal power plant project is located, is projected to be oversupplied by up to 41.5% [8], creating a high like-lihood that electricity from Jawa 9 and 10 will remain unutilized.

Binbin Mariana, South East Asia Energy Finance Analyst at Market Forces, said: “If Jawa 9 and 10 is built now, it would lock Indonesia into using coal at least until 2045. At the same time, climate experts say we need to be out of coal by 2040 globally to hope to meet the goals of the Paris Agreement. Through its role in Jawa 9 and 10, Siemens will burden our climate and Indo-nesia communities with even more CO2-emitting infrastructure. ”

“With cheaper renewables options available, Siemens should be investing more into this sector in Indonesia to help my country meet its energy needs cleanly.”

Regine Richter added: “The fact that more and more investors are turning their backs on fossil fuels, especially coal but increasingly also oil and gas, should be an alarm sign for Siemens Energy. Without a full and quick trans-formation to renewable energies, the company will not have a convincing bu-siness model. What we’re seeing so far from Siemens Energy is that they are too busy grabbing every available business to develop a clear and sustainable fossil fuel exit strategy.”

Further Reading:
Briefing Note on the ‘Eastern Station’ by EcoPeace Middle East:
https://t1p.de/uaxu

[1] See https://www.siemens-energy.com/global/en.html

[2] See https://www.reuters.com/article/us-siemens-power/siemens-energy-to-set-out-plan-to-exit-coal-generated-electricity-ceo-idUSKBN24A10Q

[3] See https://t1p.de/uaxu

[4] See annex to Briefing Note by EcoPeace Middle East on The ‚Eastern Station‘: https://t1p.de/uaxu

[5] See https://www.straitstimes.com/asia/se-asia/choked-by-jakarta-smog-residents-join-forces-to-sue-government-for-better-air-quality

[6] See https://www.marketforces.org.au/wp-content/uploads/2019/12/Korean-Jawa-9-10-Health-Impacts-compressed.pdf

[7] See (in Bahasa)
https://pojoksatu.id/banten/2020/08/05/dinilai-merugikan-izin-lingkungan-pltu-suralaya-diminta-dicabut/

[8] See https://www.reuters.com/article/indonesia-electricity-idAFL4N2AY2AO