Siemens Gamesa Renewable Energy has big problems, and it’s going to cost the company billions – what’s wrong with its onshore wind turbines?
Siemens Gamesa Renewable Energy SA is Siemens Energy AG’s wind turbine unit, and it’s one of the world’s largest wind turbine makers. Its turbine problems are expected to result in up to $5 billion in net loss for the parent company.
The company’s Spanish division found that its onshore wind turbines had worse-than-expected quality flaws. The company will have to fix flaws in rotor blades and bearings, ranging from component failures to small cracks.
We now know that Siemens Gamesa Renewable Energy’s onshore wind turbine issues have to do with wrinkles in rotor blades and particles in the bearings section on the 4.X and 5.X, the turbine maker’s two most recent onshore wind turbine platforms. Bloomberg reports that “the problems center on the discovery that a main piece on the frame of a wind turbine can move or twist over time, potentially damaging other critical components.”
About 2,100 4.X and 800 5.X models are in use. Siemens Gamesa says that 15-30% of them are problematic. The turbines can still be operated, but the company’s plan is to implement a quality management system and fix the problems within regular service intervals.
Siemens Gamesa Renewable Energy’s CEO, Jocken Eickholt, said in a call on Monday that the company “sold wind turbines that were not sufficiently tested.” Eickholt also said that the quality issues are unlikely to happen again at the same scale.
It’s going to cost the company €1.6 billion to fix these issues, and most of the costs will occur in 2024 and 2025. Siemens Energy has set up a special committee to address the quality and productivity problems, and Eickholt says that going forward, the company would place “stability and profitability before growth.”
Bloomberg reports that the company will present the result of a strategic review in November.
September 18 update: German newspaper Handelsblatt reported today that “according to industry circles,” Siemens Gamesa has largely stopped selling new onshore wind turbines.
A Siemens Energy Group spokesman refuted that claim, but confirmed that Siemens Gamesa has restricted sales: “Our absolute priority is to revise the affected systems in existing customer projects. That’s our focus.”
So Siemens is focusing on its rather large issues at hand, and also turning its attention to a sizeable backlog order. That’s prudent.
Photo: Siemens Gamesa
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