Siemens Gamesa Warns of Offshore Wind Capacity Reductions Amid EU Delays
Siemens Gamesa Faces Challenges in European Offshore Wind Expansion
Warning of Capacity Cuts and Industry Threats
HAMBURG, June 11 (Reuters) - Siemens Energy on Thursday warned of possible wind turbine capacity cuts in Europe if governments fall behind in efforts to expand offshore power, saying a lack of determination could become an "existential threat" to the industry.
The comments by one of Europe's biggest industrial firms reflect growing concerns about the future of the continent's manufacturing capabilities, which have come under intense pressure from high energy costs and Asian competitors.
Delays and Regulatory Challenges in Offshore Expansion
Europe is currently facing delays in its offshore expansion, hampered by regulatory challenges that have caused some developers to rethink their engagement, including in Germany, where 16 gigawatts of projects are at risk.
Project Approval and Grid Connection Issues
These problems range from lengthy project approvals to the risk of delayed grid connections, which can create substantial financial risks for operators.
Impact on Siemens Gamesa's Operations
Potential Downsizing and Order Shortages
While Europe's wind power plants are currently running at full capacity, a lack of follow-up orders could leave plants scrambling for contracts from 2028, said Vinod Philip, who leads Siemens Gamesa, Siemens Energy's wind division.
"It is not yet an existential threat, but it could become one," he said, adding the European Union was currently around 40 GW short of its 120 GW target for 2030.
Resource Adjustments and Factory Operations
While this would likely not lead to factory shutdowns, "we'll probably have to downsize them in terms of resources", Philip said.
Engagement with Governments and Investments
Philip said Siemens Gamesa was in talks with governments to quickly unlock projects that are at risk of being delayed, adding Europe's offshore wind supply chain had invested €14 billion ($16.15 billion) with 2030 targets in mind.
Siemens Gamesa's Position in the Market
Company Profile and Workforce
Siemens Gamesa, the world's largest maker of offshore wind turbines, operates six wind turbine plants across Europe and employs around 20,000 on the continent.
Financial Performance and Investor Scrutiny
It for years weighed on its parent's results, mainly due to quality issues that have since been resolved.
The division, which is planning to break even this year, has been the subject of investor scrutiny, with some pushing for a sale or divestment, something Siemens Energy CEO Christian Bruch said was currently not on the cards.
Additional Information
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(Reporting by Christoph Steitz; Editing by Jan Harvey)
