Siemens Deal Powers Up SmartZone

June 7, 2002
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MUSKEGON — Siemens Corp. saw in Muskegon and Grand Valley State University the right location and the right partner with which to further develop and showcase fuel cells the company plans to produce and bring to market next year.

The SmartZone high-tech business park envisioned along Muskegon’s waterfront, the tax incentives that came with it, and Grand Valley State’s commitment to support research, development and commercialization of fuel cells for commercial buildings “created an environment that is welcoming to this type of technology,” said Bud Grebey, vice president of public relations for Siemens Corp., the American arm of global technology conglomerate Siemens AG.

“We really see the university as providing the opportunity to support development and showcase Siemens’ work,” Grebey said. “They seem to have a very solid plan on how they see the future. It’s the right place at the right time and with the right set of partners.”

Siemens Corp. has agreed to partner with GVSU to develop an “Energy Center of Excellence” in Muskegon that will include an alternative-energy research center, a business incubator for alternative-energy ventures, and a fuel-cell power station that will provide electricity to the entire 34-acre business park.

The involvement of Siemens — which is building a 430,000-square-foot factory near Pittsburgh, Pa., to produce stationary fuel cells — provides both the figurative and literal power that backers of the Muskegon Lakefront SmartZone have sought. Siemens, as well as other new partners that were announced last week, represents a major breakthrough that GVSU’s David Mielke has worked to secure since the university agreed to join the SmartZone initiative.

Siemens Corp’s. involvement in the venture takes it “from beyond the dream to the reality,” Mielke said.

Mielke, dean of GVSU’s Seidman School of Business, is optimistic that landing a partner the size and stature of Siemens, which has more than 80,000 employees in the U.S. and recorded 2001 revenues of $19.1 billion, will generate new awareness of the SmartZone and attract other corporations. Among the companies with which he’s talked about potential partnerships or involvement are Texaco and British energy giant BP.

“This is the linchpin,” Mielke said. “It’s going to be the domino for our development.”

More partners will need to come on board for the energy center to work, Grebey said. Siemens shares the hopes that additional firms will step up, he said.

“We’re hoping that by making the announcement now, the program will get some new visibility and this becomes a focal point,” Grebey said.

Organizers of the SmartZone envision creating a business park that becomes a center of alternative-energy technologies such as fuel cells, which use hydrogen to produce clean electricity. They see Muskegon becoming a global destination for researchers working on stationery fuel cells designed for use in buildings.

“Hello fuel-cell energies, good-bye foundries,” said Muskegon Mayor Steve Warmington, conjuring up images of the community’s former industrial base.

“It’s wonderful to have an international company that believes in Muskegon,” Warmington said at last week’s press conference to announce the Siemens partnership. “Today is the beginning of the new evolution of time.”

Research into and the commercialization and production of fuel-cell technologies is seen as the economic sector of the future for Muskegon, which began as a lumber town and later evolved into the home of numerous foundries.

“This is the new economy and this is the new type of business activities we can bring to our community,” Muskegon Area Chamber of Commerce President Cindy Larsen said. “Change is happening.”

The centerpiece of the venture is creating the “power system of the future” and the “office of the future” as a way to demonstrate the new technologies’ viability.

The $8 million to $9 million, 20,000-square-foot business incubator and research center is targeted for opening by March 2003 in a new facility built by Workstage LLC, a division of Steelcase Inc. formed in 2000 to quickly construct office buildings that are highly adaptable and highly energy efficient. The intent is to make the building fully energy self-sufficient, Mielke said.

Siemens will provide a commercial fuel cell that will provide 250 kilowatts of power to the facility, which will include a heat recovery unit from Ferrysburg-based Johnston Boiler Co. as part of its heat and air conditioning system, solar-energy cells on the roof, and nickel metal hydride batteries from Harding Energy Inc. in Muskegon to store electricity.

The next phase involves developing a 4-megawatt fuel-cell power station to provide electricity to the business park, with initial operations starting next year and full operations coming in 2005. The cost of the power station is estimated at $20 million to $25 million.

Adding to Siemens’ interest in the project was its existing presence in Michigan and involvement with Grand Valley on past projects. The corporation’s automotive operations are based in Detroit, its materials handling arm is in Grand Rapids, and the company has worked with Grand Valley on the university’s new Center for Health Professions building under construction in downtown Grand Rapids and a book retrieval system for the DeVos Center.

“We consider ourselves part of the community and we like to make investments in communities where we do business,” Grebey said           

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