Siemens Anticipates Significant U.S. Energy Growth Following Passing of Federal Energy Bill

NEW YORK--(BUSINESS WIRE)--Aug. 9, 2005--From IT upgrades to the national energy grid to increased production in ethanol, Siemens Corporation said today several of its operating companies stand to benefit from the Federal Energy Bill, signed yesterday by the President.

The promotion of renewable energies, stronger energy efficiency standards, and performance contracts are among the many provisions of the energy bill that will reinforce Siemens' innovations in power generation, transmission, distribution, and energy savings projects.

“The energy bill will benefit the environment, consumers and innovative energy businesses in the U.S.”

"The energy bill will benefit the environment, consumers and innovative energy businesses in the U.S.," said George Nolen, president and CEO of Siemens Corporation. "For Siemens, the legislation touches sectors where the company does substantial work, including advanced clean coal generation, wind energy and electric transmission grid technologies. The bill will increase the nation's energy supply, promote environmentally friendly and efficient energy processes and reform and stimulate much needed investment in new technologies that improve the nation's energy infrastructure. We all stand to benefit from the initiatives laid out in this bill."

The energy bill contains many significant incentives to improve the nation's energy position. For example, the 20 percent investment tax credit for coal-based generating projects using gasification technology will drive investment in cleaner coal projects and in Siemens' combustion turbine technology, where the company is a market leader. Siemens is slated to provide turbines for the Southern Illinois Clean Energy Center, which will be the first Integrated Gasification Combined Cycle facility in the country and one of the cleanest coal-burning facilities in the world. The continuation of biomass grants, which support owners and operators of facilities that produce electricity, heat or petroleum substitutes using trees, plants, brush, and wood chips will be mutually beneficial to companies, consumers and the environment. With the aid of a $500,000 Biomass Grant from the U.S. Forest Service's Fuels for Schools program last year, Siemens was able to help one of Idaho's poorest counties convert its aging 50-year-old oil-fuel boiler into a more economically efficient wood chip-fueled boiler.

"As one of the largest power and energy companies in the world, Siemens provides technologies and services to improve power generation, and transmission and distribution processes. With the passing of this legislation, we believe the nation has taken an important step on the path to developing and implementing new generations of cleaner and more efficient energy technologies and to becoming more self-reliant and productive," said Nolen.

Other aspects of the energy bill that will positively impact Siemens and its customers include:

-- Mandatory transmission reliability standards for the bulk of the nation's power systems along with incentive-based rates that will encourage deployment of advanced transmission technologies. Both will drive much needed investment for electric transmission by as much as 60 percent a year.

-- Repeal of the Public Utilities Holding Company Act of 1935, which would give utilities more discretion in diversifying their holdings and further increase industry investment.

-- Tax credits for renewable and environmentally friendly generation technologies that emphasize wind and fuel cell power. Without the reauthorization of tax incentives, it was expected the wind power market would have seen a substantial decline. By maintaining these tax incentives, the wind power market should remain at approximately $2.6 billion a year. Siemens is now working with several customers who had been waiting for the tax provisions to pass before moving forward with projects.

-- Loan guarantee program to provide incentives for innovative energy technologies that avoid, reduce or sequester air pollutants or greenhouse gases. Eligible projects for Siemens include renewable systems, advanced combustion systems, IGCC, solid oxide fuel cells, carbon capture and sequestration technologies, efficient transmission and generation technologies, and efficient end-use technologies.

-- Reauthorization of Energy Savings Performance Contracts for federal facilities for 10 years and new mandatory efficiency requirements, including increased goals for federal buildings. Through efficiency and lower energy consumptions programs, Siemens has delivered more than $1 billion in savings within commercial and industrial markets.

-- New mandatory efficiency requirements including increased goals for federal buildings and products to exceed standards by 30 percent, and metering and sub-metering requirements for federal buildings.

-- Requirement for refiners to produce 7.5 billion gallons of ethanol a year by 2012. The mandate will bring investors off the sidelines and spur faster industry growth and the creation of new production facilities. Siemens supplies computer systems, electrical and process control equipment for more than half of the nation's 100 plus ethanol plants. Since 2000, Siemens has equipped more than two-thirds of the newly constructed plants.

-- Requires the federal government to purchase NEMA Premium electric motors and Energy Star labeled products along with authorizing R&D funding for a Next Generation Lighting Initiative and Industry Alliance for solid state lighting.

About Siemens

Siemens AG (NYSE:SI) is one of the largest global electronics and engineering companies with reported worldwide sales of $91.5 billion in fiscal 2004. Founded more than 150 years ago, the company is a leader in the areas of Medical, Power, Automation and Control, Transportation, Information and Communications, Lighting, Building Technologies, Water Technologies and Services and Home Appliances. With its U.S. corporate headquarters in New York City, Siemens in the USA has sales of $16.6 billion and employs 70,000 people throughout all 50 states and Puerto Rico. Thirteen of Siemens' worldwide businesses are based in the United States. With its global headquarters in Munich, Siemens AG and its subsidiaries employ 440,000 people in 192 countries. For more information on Siemens in the United States: www.usa.siemens.com.