REM: Confidence in wind industry rocked by quality problems at turbine maker Siemens Gamesa

Quality problems at wind turbine manufacturer Siemens Gamesa – one of the world’s largest – have rocked confidence in the wind sector. This followed a surprise statement by Siemens Energy on widespread issues with wind turbines at its subsidiary, knocking nearly €7bn ($7.6bn) in a day off the value of the parent.  

As a result, Siemens Energy scrapped its profit forecast for the year.

Between 15% and 30% of installed Siemens Gamesa turbines may have significant component failures, said executives.

Late on June 22, Germany-based Siemens Energy announced that a review of technical issues at its struggling subsidiary Siemens Gamesa had found a “substantial increase in failure rates of wind turbine components”.

The board of the Madrid-based subsidiary has initiated an “extended technical review” that is expected to incur “significantly higher costs” than had been previously assumed. The costs are now estimated to be more than €1bn ($1.09bn).

“It is too early to have an exact estimate of the potential financial impact of the quality topics and to gauge the impact of the review of our assumptions on our business plans,” said Siemens Energy in a statement.

“However, based on our initial assessment as of today, the potential magnitude of the impact leads us to withdraw the profit assumptions for Siemens Gamesa and consequently the profit guidance for Siemens Energy Group for fiscal year 2023.”