NEW YORK (TheStreet) -- As Siemens (SI) expands into wind power from its core businesses of energy, industrial machinery and health care, it grows more like General Electric (GE - Get Report) every year.
Those similarities are highlighted by a big deal Siemens announced yesterday with a unit of Berkshire-Hathaway (BRK.A). Siemens described it as the biggest onshore wind turbine order ever. MidAmerican Energy Company ordered 448 huge wind turbines, which will produce 1.05 gigawatts of power in 2015. They will be made and installed in the center of America's wind belt.
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Solar power grabs most of the renewable energy headlines, but hydropower and wind create much more of this country's new renewable energy, according to the Energy Information Agency. Of the 12% of electrical grid energy produced from renewable sources in 2012, hydropower produced 56%, wind produced 28%, and solar a mere 1%. In 2012, wind power generated roughly 140 billion kilowatt hours.
This deal should bring Siemens' market share in wind closer to that of GE. It's currently third in the market, according to most studies, behind both GE and Vestas Wind Systems. A Danish company traded in Copenhagen, Vestas specializes in wind. Its shares are up by quite a lot this year alone.
Tax credits have made wind a healthy industry, and the Siemens deal was timed to beat the end of the Renewable Electricity Production Tax Credit, which will happen in January unless Democrats are able to extend it. An extension is not in the budget deal now before the Senate.
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GE, Vestas and Siemens are all focusing on ever-longer, ever-lighter turbine blades and better gearboxes to drive them more efficiently. The industry could be on the cusp of rapid technological change.