Good news for shareholders of Toronto-based RuggedCom, one of the world’s leading makers of ruggedized networking gear for the smart grid. Facing a hostile takeover from St. Louis-based Belden Inc., RuggedCom has found a white knight in Siemens Canada Ltd., the Canadian subsidiary of German industrial giant Siemens AG.

Siemens has agreed to purchase RuggedCom for $382 million or $33 a share, compared to the $272.4 million or $22 a share offer from Beldon. It represents a 50% premium on a per-share basis and, quite frankly, Siemens is a better fit for RuggedCom and for keeping innovation in Ontario.

Siemens Canada, which is based in Burlington, Ont., has a strong and growing presence in Canada — about 4,400 employees and $3 billion in annual revenues. It is also pushing hard into the same smart grid space occupied by its main competitor, General Electric. Ontario is shaping up to become a hub of smart grid development in North America, so it makes sense for Siemens and Vaughan, Ont.-based RuggedCom to hook up.

I was the first journalist to write about RuggedCom with a story in the Toronto Star back in July 2006. Since then it has consistently grown revenues and profits, even during the downturn. “Either we’re going to get acquired by a strategic peer or reach a point where we’ve got … a good story to take it to an IPO,” company founder and CEO Marzio Pozzuoli confidently told me when we first spoke nearly six years ago. Pozzuoli, by the way, was a technology manager in GE’s power management operation before deciding to leave the company to found RuggedCom. Such a good move. The successful IPO part came true in 2007, and now the strategic acquisition part is coming true with the Siemens purchase. As Pozzuoli stated today, “We have great respect for Siemens and believe RuggedCom will be well positioned for continued growth and industry leadership under their ownership.”

Could RuggedCom have done it alone? Perhaps — but with the massive clout of Siemens behind it, it can do a heck of a lot better. That’s just how the cleantech space is expected to be over the coming years, as startups with great technology and proven leadership seek the resources and reach of established multinationals. An added benefit to this deal is that it seems to reinforce Siemens’ commitment to Ontario.

Anti-wind groups won’t be happy to read this, but for the rest of us — the majority — who see wind energy as part of the solution to a low-carbon future, then you’ll be happy to read about efforts underway to make wind turbines that are more powerful, lighter and more reliable. I explore some of these in my latest piece for MIT Technology Review.

This is particularly crucial if we are to responsibly tap into the vast wind resources located in offshore locations. Going offshore offers the ability to harness much stronger and more consistent winds with larger and higher performing machines, but it also makes it more difficult to do maintenance and repairs. Most onshore wind turbines of 2 or 3 megawatts in size have gearboxes to match the slower turbine rotor speed with the high speeds of its internal generator. Gearboxes, by design, have more moving parts and therefore need regular maintenance. They’re also more prone to malfunction. This is okay when onshore, because it’s easier to access the turbines for repair. Offshore, it’s not so easy. It costs tremendous amounts of money to rent barges that will take repair crews to these remotely located turbines, and that’s assuming the weather is cooperating.

Some turbine manufacturers — Siemens, Enercon, Goldwind, Alstom — are now making direct-drive turbines, meaning no gearboxes. They’re less complex, have fewer moving parts, so are more reliable. Problem is, they’re super heavy. For direct drive you need to have a generator that can pump out the same amount of power at a much lower speed of operation, meaning you have to build a larger generator that has more surface area for the permanent magnets inside to sweep across the stator coils (a movement that induces current in the coils). This means more magnets, meaning much more weight and an increased reliance on rare-earth materials.

So, while direct-drive is ideal for offshore locations because of lower need for maintenance, getting to machines that are 10 MW in size will create generators that are simply too heavy to be economically deployed. One solution being explored, as you’ll read in my Technology Review piece, is to use superconductivity technology that creates super powerful and efficient electromagnets. This will eliminate the need for permanent magnets and therefore rare-earth materials, and it will create a much more powerful magnetic field at a fraction of the weight of conventional direct-drive designs. Both GE Global Research and Advanced Magnet Labs, two of six recipients of DOE funding for research in this area, believe they can make direct-drive wind turbine generators with a 10 MW capacity but weighing only 70 or so tons. A conventional direct-drive generator would weight over 250 tons.

Anyway, it’s all interesting stuff. At the moment, there are commercial direct-drive designs out there ranging from 6 to 10 MW in size. Siemens just announced its 6 MW version in June. But whether those can be manufactured and deployed on a large scale economically is still unclear. Something new will be needed to crack this new barrier for wind, and while it might not come this decade, it will come.

Earth2Tech has a fair and balanced report that examines some of the challenges and growing pains associated with Ontario’s feed-in-tariff program, with particular reference to the high prices being paid out for solar. Read article here. The article is based on comments made by Patricia Lightburn, an analyst with the Ontario Power Authority. She talks about some of the concerns I have with the program — that  it can’t react fast enough to changes in the market (i.e. solar-module price drops over the past two years) and it didn’t set caps on solar that trigger price reviews. The two-year price review schedule just doesn’t cut it, and while hindsight is 20/20 it probably would have been prudent to have bi-annual price reviews or have reviews triggered when project applications reach a specific cap, which is lifted when new prices are set.

I certainly hope these issues are discussed at the upcoming Canadian Solar Industries Association annual conference in Toronto next week. I also hope that in addition to the celebration of how quickly the Ontario solar market is growing, they also thank Ontario consumers who are making it all possible and offer insight into how long they’ll be asked to prop up an industry that, while bringing jobs and clean energy to the province, must eventually demonstrate it can stand on its own. I’m also guessing we’ll get a believable (i.e. not exaggerated) update on how many jobs in the solar industry have been created so far, and are expected to be created, in the coming years. Next year, by all measures, will be a very important year for the FIT program as we’ll start to see more concrete evidence of this job creation. It will also be an opportunity to make changes to the FIT program that strike the right balance between green energy development, job creation and cost to ratepayers.

On the topic of green energy, Siemens announced it will establish a wind-blade manufacturing facility in Tillsonburg, creating 300 direct jobs. The plant is being built as part of its agreement to supply 600 megawatts of wind turbines to Samsung C&T and its development partner, Pattern Energy. I’m more bullish about manufacturing announcements on the wind side of the equation, partly because there tends to be more permanence  to the wind-turbine supply chain and we can leverage this supply chain and associated infrastructure as we explore the offshore wind market, which is where I think Ontario could establish an early foothold — unlike in solar — and sustained leadership in the North American market.

Canadian Solar announced today that it plans to establish the country’s first solar module manufacturing facility in Guelph, Ontario, just an hour or so northwest of Toronto. The new facility will be capable of making 200 megawatts of solar modules a year and will create 500 new jobs for the region. The announcement wasn’t a surprise. Canadian Solar told me shortly after Ontario’s feed-in-tariff program was launched that it planned to establish manufacturing here to comply with the province’s local content rules. But the commitment, now official, brings good news to a government trying to justify the high prices ratepayers will end up paying for solar, wind and other clean energy sources under the feed-in-tariff program.

There was more positive job news the day before, when Germany’s Siemens AG announced plans to build a wind-turbine blade factory in southern Ontario — the first in the province — as part of a deal to supply 600 megawatts worth of wind turbines to Samsung C&T, which under a deal with the province of Ontario has agreed to develop 2,500 megawatts of wind and solar projects (2,000 MW of it wind) by 2016. “The implementation of this agreement will create up to 300 ‘green collar’ jobs and up to an additional 600 construction and indirect service jobs over its term,” according to a press release announcing the deal. Like the Canadian Solar announcement, we knew it was coming (even though we didn’t know Siemens would be involved) but it’s nice to finally see some specifics related to job numbers and the kind of manufacturing that will take place.

Here’s the government’s press release, which — no surprise — touts both the Canadian Solar and Siemens announcements and claims that FIT contracts issued to date mean thousands of new jobs. “The 694 clean energy contracts already announced are expected to create approximately 20,000 direct and indirect green economy jobs over five years and about $9 billion in private sector investment,” it reads. Of course, once your start throwing in “indirect” jobs you can pretty much make up whatever numbers you want. Still, there’s a buzz in Ontario and despite some fumbles — such as the lowering of the price for small ground-mount solar systems, which has created a political shitstorm — we are seeing substantial investments (or commitments to invest) in the province. We’ll have a better sense of the true numbers after the first quarter of 2011, when many of these new facilities are expected to be operational and when stricter local content rules for solar go into effect — that is, when local content requirements for solar projects less than 10 kilowatts in size jumps from 40 to 60 per cent, and for larger solar projects from 50 to 60 per cent.

Last week, Austrian electronics company Fronius International announced it was establishing a solar inverter manufacturing site in Mississauga (just west of Toronto) that would produce 50 megawatts of inverters annually and, once operational by the end of the first quarter 2011, will employ about 100 people. “Ontario is one of the most important markets of the future for Fronius,” said Romuald Goure, managing director of Fronius Canada. (more…)