By Christoph Steitz and Laila Kearney FRANKFURT/NEW YORK, Feb 3 (Reuters) - Siemens Energy plans to invest $1 billion to expand U.S. power grid and gas turbine component production as the country
Siemens Energy Plans $1 Billion Investment in U.S. Power Sector
Siemens Energy's Expansion in the U.S.
By Christoph Steitz and Laila Kearney
Investment Details
FRANKFURT/NEW YORK, Feb 3 (Reuters) - Siemens Energy plans to invest $1 billion to expand U.S. power grid and gas turbine component production as the country builds data centres needed to power AI technology.
Impact on Production Capacity
The world's biggest technology companies are pouring hundreds of billions into U.S. data centres that will need more power than the country's ageing electrical system can provide.
Market Demand for Data Centres
Data centres may take up 12% of U.S. grid capacity in two years, nearly triple 2024's share, government reports say.
"The U.S. is the hottest electricity market in the world at the moment ... And I don't see this ending," Siemens Energy CEO Christian Bruch told Reuters, adding the market was the biggest for order intake last year.
Big Tech's requirements have led to a surge in power deals aimed at quickly building and connecting new electricity supplies, but supply chain bottlenecks, prolonged permitting processes and other hurdles are challenging those plans.
Siemens Energy's investment, part of a 6 billion euro ($7 billion) push, include the construction of a new factory in Mississippi to produce power grid equipment, which Bruch said would be the German group's largest such facility worldwide.
The new factory is expected to be completed in 2028.
Bruch said the expansion in the United States, where the company makes 22% of sales and employs 12% of staff, would add around a fifth to Siemens Energy's global production capacity for large turbines.
"A big chunk of what's driving demand is data centres. We have around 20 gigawatts of generation power for data centres, (in the) U.S. only. And this is both orders and reservation agreements," Bruch said.
The expansion would allow its turbine factory in Berlin, its biggest, to cater more to European and Middle East clients, Bruch said, rather than exporting to the U.S.
($1 = 0.8467 euros)
(Reporting by Christoph Steitz and Laila Kearney; Editing by Alexander Smith)
