Siemens Energy recently gained full control of its wind turbine joint venture in Spain, hoping to turn around a division that had been struggling with profit warnings. However, just two weeks later, the company revealed that the quality issues at Siemens Gamesa were much worse than expected and could cost €1bn to fix. This news caused shares in Siemens Energy to drop by 30%. Siemens Energy CEO Christian Bruch expressed his frustration, stating that the problems were more severe than he had imagined.
The wind turbine industry has faced challenges over the past few years, including rising costs, fierce competition, and technical problems that have resulted in significant losses despite the growing demand for clean energy. Bruch believes that the industry needs to rework its business model. Siemens Energy has provided limited details about the turbine flaws but mentioned that they involve bearings and rotor blades and could impact up to 30% of the affected models. Insider sources suggest that the problems are related to Siemens Gamesa’s 5.X turbine, as well as its predecessor, the 4.X, which were introduced to the market between 2017 and 2019.
Siemens Gamesa has sold approximately 15GW of these turbine platforms combined, indicating that more than 2,000 units have been purchased by customers. An internal committee is conducting a review that includes examining suppliers around the world, including in China. Bruch has emphasized the need to address the corporate culture at Siemens Gamesa and believes that too many issues have been ignored. While there is pressure on Bruch and Siemens Gamesa CEO Jochen Eickholt, they still have the full trust of Siemens Energy’s supervisory board.
The problems at Siemens Gamesa, one of the largest turbine suppliers globally, have created uncertainty within the industry at a time when wind farm developers are rushing to construct new projects to meet the growing demand for clean energy. The 5.X platform accounted for 74% of Siemens Gamesa’s onshore wind order intake in the first quarter of 2023. This situation is problematic for the energy transition and has put financial strain on various projects.
Siemens Gamesa has assured its customers, such as Iberdrola, that any issues will be resolved before installation. Wind developers and other companies within the industry are closely monitoring the situation and working with Siemens to understand any potential impacts. Some developers are concerned that the turbine problems may lead to increased prices, which could further strain their finances.
Siemens Gamesa’s challenges are indicative of issues within the industry, as competitors have also faced quality problems due to the rush to produce larger turbines at lower costs. However, there has been a market correction recently, with companies like General Electric moving towards standardization and higher offtake prices for wind farm developers. This shift may ultimately be beneficial, as it will likely lead to a renewed focus on quality.
For now, Siemens Energy must focus on mitigating the damage caused by the turbine problems. The company’s shares remain significantly below their pre-announcement price, and the company is set to update investors on August 7. Siemens Energy executives are grappling with the challenge of determining the long-term implications of the failures. Despite the current difficulties, addressing these issues may ultimately result in a more robust and sustainable wind turbine industry.
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
