Siemens Energy suffers headwinds from SGRE

6 August 2021

“We are not satisfied with the performance of SGRE [Siemens Gamesa Renewable Energy] which suffered a significant setback in the turnaround of the onshore business”, said Christian Bruch, president and CEO of Siemens Energy on 4 August, announcing Siemens Energy’s Q3 21 results. Nevertheless “our activities at Gas and Power are fully on track and the segment delivered as planned.” Overall “the attractive market fundamentals for Siemens Energy” do not change “however due to the headwinds at SGRE we do not expect to reach the low end of the group margin guidance for the full year.”

The financial performance of Siemens Gamesa (67% owned by Siemens Energy) has been significantly impacted by rising commodity prices and the higher-than-expected ramp-up costs for the new 5.X platform. “That impact — exacerbated by the pandemic, especially in  Brazil — resulted in a provision for onerous contracts related to projects to be executed in FY22 and FY23”, SGRE said.

In Q3 21, Siemens Gamesa began to introduce clauses into its onshore contracts to protect against commodity price volatility (mainly in steel towers).

In a more positive development, Siemens Gamesa has recently announced it is to supply 39 of its SG 5.8-170 onshore turbines to two sites (Ranasjö and Salsjö) in Sweden dubbed the ‘Twin Peaks’, totalling 242 MW, with commissioning due in Q1 2024. The turbines will have a nominal capacity of 6.2 MW with 170 m rotors.

“The deals add to sustained momentum for the Siemens Gamesa 5.X platform in the Nordics, and in particular in Sweden which has been a fast adopter”, SGRE commented.

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