Status: 07.02.2023 2:25 p.m
The problems at the wind power subsidiary Siemens Gamesa ensure a strong loss at Siemens Energy. The wind energy industry is currently under pressure, but the prospects could improve soon.
While its own business improved significantly, renewed burdens at the wind power subsidiary Siemens Gamesa hailed the result of Siemens Energy. The energy technology group more than doubled its loss in the first fiscal quarter. The energy technology group posted a net deficit of 598 million euros. The fact that the order backlog for the entire group was a record EUR 98.8 billion had a positive impact.
Siemens Gamesa is completely taken over
The Spanish subsidiary Siemens Gamesa has been a burden on the group for years. Last week, Gamesa reported a loss of 884 million euros for the first quarter due to unexpectedly high guarantee and maintenance costs. The renewed losses at Gamesa were a hard blow, said Siemens Energy boss Christian Bruch.
The parent company recently successfully completed a takeover bid for the remaining shares in the wind turbine manufacturer listed in Spain. After the takeover, Siemens Energy will delist Gamesa from the stock exchange. The management expects annual synergy effects of around 300 million euros. “The intended withdrawal of Siemens Gamesa from the stock exchange will help to focus on solving the operational problems and the turnaround,” commented Bruch.
competition from China
Actually, the wind power subsidiary was therefore a beacon of hope for the group, because the idea was that the energy transition should ensure a profitable business. But that hasn’t happened so far. Wind farm operators can benefit from the increased electricity prices; however, the situation is different for plant manufacturers. Other companies in the industry are not doing well either. A few days ago, for example, the Danish wind turbine manufacturer Vestas announced a drop in sales for the past financial year.
On the one hand, there is strong competition between the various wind turbine manufacturers that creates price pressure. For example, the strong Chinese competition is causing problems for local providers on the market. “In the last few decades, China has developed into an important player in the field of renewable energies,” says Cristian von Angerer, Chief Investment Officer at Inyova.
China is increasing the pressure on European producers: “Chinese companies now produce and sell five times more wind turbines per year than producers from the EU,” says the expert. The companies would run the risk of losing market share to Chinese competition.
High cost pressure
On the other hand, the disrupted supply chains and high inflation have also led to sharply increased material and raw material costs for wind turbine manufacturers, which the companies can only absorb to a limited extent. The contracts were negotiated at fixed prices; that’s why wind turbine builders are now in dire straits.
According to von Angerer, however, the strict and lengthy award and approval procedures also cause problems for the manufacturers. Nevertheless, analyst Rajesh Singla from the French bank Société Générale basically believes that the manufacturers of wind turbines are capable of the fact that the years of weak sales could end in the new year.
Help comes, for example, from politicians: the federal government recently approved a draft law that is intended to greatly accelerate the expansion of onshore wind power in Germany. It provides for the federal states to provide significantly more space for wind power in the future than in the past.
“General Staff expansion”
Energy independence and energy security are once again the focus of interest and public funding policy, says Nicolas Jacob, fund manager at ODDO BHF. According to Jacob, global wind power capacity is expected to double by 2027. The demand for the installation of wind turbines is therefore likely to increase.
And recently Chancellor Olaf Scholz (SPD) announced that he wanted to promote the expansion of wind power in Germany. “We’re tackling the expansion with military precision: we’re currently drawing up a timetable of what new plants have to be built by when so that we can achieve our goals for 2030,” he told “Bild am Sonntag”.
“Every month there will be a discussion with the federal states about how far they have progressed. Anything that is not done on time must be made up for. By 2030 there will be an average of four to five wind turbines a day on land,” says Scholz.