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According to CEO Christian Bruch, Siemens Energy, a leading global energy company, is set to decide on the timing of selling revised versions of its problematic 4X and 5X onshore wind turbine models. The company has faced a crisis due to these faulty models, which have plagued rotor blades and bearings issues.
Reuters reported that the repair costs amounted to approximately 1.6 billion euros ($1.72 billion).
Challenges Impacting Siemens Energy's Cash Flow
While Siemens Energy's gas and grid technology businesses have shown solid results, its wind turbine unit has significantly drained its cash flow. Bruch anticipates the largest cash outflow in 2025 as the company focuses on repairing defective turbines. Detailed plans for these repairs are currently being developed, with the process expected to take several years.
According to Financial Post, Siemens Energy reported a negative pre-tax cash flow of €283 million ($304 million) in the fiscal first quarter through December. This represents more than four times the loss recorded during the same period last year.
As previously stated, the company expects its Spanish wind unit, Gamesa, to break even by 2026. However, addressing the issues with faulty wind turbines has been a priority, leading to additional liquidity needs.
Siemens Energy has grappled with problems related to faulty wind turbines for several years, reflecting the broader challenges the industry faces. In fiscal year 2023, losses of €4.59 billion were attributed to Gamesa, further exacerbating the company's struggles.
The difficulties in quantifying the necessary repairs prompted Siemens Energy to seek funding guarantees from the German government, preserving their ability to secure new business across other units.
Stabilizing Finances and Strategic Measures
To bolster its financial position, Siemens Energy recently sold a stake in its Indian unit for €2.1 billion. This move has provided much-needed stability amidst the ongoing issues with the wind turbine division. The company remains committed to resolving the mechanical problems and restoring the reputation of its wind turbine models.
Siemens Energy anticipates that the revised wind turbine models will be available for sale shortly, signaling a step forward in resolving the crisis. By addressing the quality issues and improving performance, the company aims to regain market confidence. The grid technology and gas turbine businesses continue to thrive, contributing to Siemens Energy's overall resilience.
Photo: Siemens Gamesa website
