Siemens AG has agreed to acquire the solar thermal power company Solel Solar Systems Ltd. To date, the majority stake has been held by Ecofin Ltd., a London-based investment firm, and another major shareholder.

Solel Solar Systems has a workforce of more than 500 and is a supplier of solar receivers, which are key components of so-called parabolic trough power plants. The company, which posted revenue totaling almost US$90 million in the first six months of its current fiscal year (Jan.1 to June 30), also plans and constructs solar fields.

The purchase price is about US$418 million. The transaction is subject to approval by the responsible authorities. It is anticipated that the closing will take place before the end of this calendar year.

Since 2006, Solel has also been present on the Spanish market, supplying key components for 15 solar thermal power plants with a combined capacity of 750 MW. In addition, the company is also active in the U.S. market.

Until 2020, the market for solar thermal power plants will show annual double-digit growth rates and attain a volume of over EUR20 billion. In the future, the primary focal growth regions will be the U.S., South Africa, Australia, Spain, India, North Africa and the Middle East.

Parabolic trough power plants are particularly suitable for regions with high levels of direct insolation. The principle is simple: curved sun-tracking mirrors capture the sunlight and concentrate it on the solar receiver. A heat transfer medium, which is heated by the concentrated solar radiation, flows through the solar receiver. In a heat exchanger, steam is then generated for a steam turbine, which drives a generator, which in turn generates electricity. Together with the electrical and instrumentation and control equipment and the cooling systems, these components form the power block of a solar power plant.