Siemens Gamesa lowers forecast : Gloomy mood in the wind power industry

Status: 01/21/2022 1:12 p.m

Business is bad at wind turbine manufacturer Siemens Gamesa. The company is not alone in this: the entire industry is suffering from rising costs and lengthy approval processes.

Siemens Gamesa had to lower its sales forecast for the full year after disappointing quarterly results. The Spanish wind power subsidiary of the energy group Siemens Energy achieved an operating loss of 309 million euros in the first quarter of the current fiscal year, i.e. in the period from October to December, before special items. After the figures were announced in Madrid, the shares of the wind turbine manufacturer fell by eleven percent.

On the one hand, the company management blamed problems with the supply chain. At the same time, there are difficulties in the production of the new onshore turbine generation 5.X. These were exacerbated by the supply bottlenecks. An operating loss is now possible for the year as a whole.

In terms of sales, Siemens Gamesa is now preparing for a decline of up to nine percent. The parent company also had to adjust its expectations for the 2021/22 financial year downwards. Siemens Energy now calculates a drop in sales of up to two percent for the current fiscal year.

Renewable energies as a beacon of hope

The wind power subsidiary was actually the great hope for the energy transition within the energy company. But Siemens Gamesa repeatedly caused bad news with profit warnings and has been the problem child of Siemens Energy for years. “Siemens Gamesa’s profit warning makes it clear that the wind power industry is suffering from rising costs, while technological competition is hampering new product launches,” said Akash Gupta, an analyst at JPMorgan Bank.

Competitor Vestas is also suffering from the delivery difficulties resulting from the pandemic. The operating result of the Danish group fell by 87 million euros in the third quarter of the current financial year. When announcing the figures in November, CEO Henrik Andersen said: “With supply chain instability and high component, material and transport costs expected to persist into 2022, our full focus is on mitigating the impact of external factors to protect profitability and achieve our goals.”

Expansion of wind energy has stagnated for years

The growth figures for wind turbines in Germany reveal the problem of the industry in this country. The expansion of wind energy has been stagnating for years: Last year, a total of 484 onshore wind turbines with an installed capacity of 1925 megawatts were installed, as reported by the German Wind Energy Association and the VDMA Power Systems trade association.

This means that the addition rose again compared to the previous year. However, the increases are still at a small level, especially compared to 2017, when onshore wind turbines with a capacity of 5333 megawatts were put into operation. “The expansion is increasing, but only regionally and at too low a pace overall,” said Hermann Albers, President of the German Wind Energy Association.

Almost three quarters of the newly installed capacity was realized in 2021 in Lower Saxony, Brandenburg, North Rhine-Westphalia and Schleswig-Holstein. Lower Saxony and Brandenburg were the leaders with 104 new systems each. Apart from the city-states, the smallest additions took place in Bavaria, Saarland and Saxony. According to experts, one of the reasons for the slow expansion is the lengthy approval process, which can drag on for years.

Habeck is conducting talks in the federal states

In order to achieve the climate goals, Climate Protection Minister Robert Habeck now wants to significantly accelerate the expansion of wind power and also involve the federal states. During a visit to Munich, the Greens politician said on Thursday that the expansion of renewable energies nationwide must be driven by “ecological patriotism”.

The Bavarian Prime Minister Markus Söder announced a concession. By March at the latest, Bavaria intends to make proposals on how wind power could be expanded in the state. With the proposals, Bavaria also wants to put wishes on the table, announced Söder and referred to demands for the expansion of the energy lines.

Problems also with wind power at sea

There are also problems with the expansion of offshore wind turbines: The head of the Federal Maritime and Hydrographic Agency (BSH), Karin Kammann-Klippstein, recently pointed out numerous conflicts of use in the North and Baltic Seas. “The coalition agreement provides for ten percent of the area that should be free of any type of harmful use. Ten percent would be reserved entirely for nature reserves,” said the BSH President.

In addition, sea areas are used by agriculture and the military, and there is an obligation under international law to keep international shipping lanes open: “There are restrictions on the development of wind farms.”

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