Bloomberg News

Caterpillar’s MWM Sees Rise in Clean Engines Amid Nuclear Woes

February 17, 2012

Feb. 16 (Bloomberg) -- MWM GmbH, the German engine maker bought last year by Caterpillar Inc., said more customers are looking for alternative-fuel engines as Germany winds down its nuclear power.

Higher energy prices and supply shortages are leading private, public and industrial sectors to search for clean, decentralized ways to produce power, Willy Schumacher, managing director of Mannheim-based MWM, said by phone. Decentralized power is energy produced at the point of use, unlike power generated from large, remote power stations.

“More and more customers and companies such as ours are looking for decentralized power generation as substitutes for older and more risky technology,” Schumacher said. “All the discussions going on in Europe about the future of nuclear power and countries such as Germany, which has already decided to exit, mean that through this acquisition we will be very well positioned to replace some of that power.”

Caterpillar, the largest maker of construction and mining equipment, bought MWM in November for 580 million euros ($760 million). The Peoria, Illinois-based company expects to spend about $2.6 billion this year on research and development, and says more than half of its R&D costs the past few years have been linked to reducing emissions. The company is developing technologies to conform with U.S. and European regulations to cut such emissions as nitrous oxide from non-road diesel engines.

“A substantial portion -- billions of dollars -- of Caterpillar’s overall research and development investment in recent years has been directed to the company’s largest product development effort in its history: the development of technologies to reduce criteria emissions,” said Rachel Potts, a spokeswoman for Caterpillar.

Demand-Driven Market

No single technology will replace nuclear power, said MWM’s Schumacher. Gas, low energy gas, biogas and coal mine methane that can be used to produce both heat and power will play “a major role,” he said. MWM’s customers include industrial companies, utilities and independent power producers.

“It’s clearly a demand-driven market,” the director said. “Government regulations and fiscal incentives are major reasons for growth in the co-generation market.

‘‘New emission-reduction technologies are likely to promote our product and co-generation -- repowering programs of old power plants are seen as a driver for us for the next decade and also the emissions credits create new opportunities for our business.’’

--Editors: Randall Hackley, Reed Landberg

To contact the reporter responsible for this story: Louise Downing in London at Ldowning4@bloomberg.net

To contact the editor responsible for this story: Reed Landberg in London at landberg@bloomberg.net


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus