Summary
- Siemens Energy, Vestas, Orsted all report results
- Results reflect ongoing problems in maturing wind sector
- Orsted cuts jobs, Vestas scraps dividend
FRANKFURT/COPENHAGEN, Feb 7 (Reuters) – The world’s three biggest wind power groups on Wednesday gave a sober view of the year ahead for an industry buffeted by project delays, equipment problems and inflation.
Siemens Energy, the world’s largest maker of offshore wind turbines, expects a 2024 loss before special items of around 2 billion euros ($2.2 billion) at its troubled wind division Siemens Gamesa, where quality problems at some onshore models have caused a major crisis.
Its CEO Christian Bruch said that even though the overall energy sector had strong fundamentals “one still has to note that … the speed at which grids and renewables are expanding is still not sufficient”.
He said the current build-out, most of which is happening in China, put the world on track to increase global renewable capacity two-and-a-half-fold by 2030, below the three-fold target agreed at last year’s COP28 climate summit in Dubai.
In addition, rising prices for raw materials and components as well as regulatory delays have caused writedowns and losses across the wind industry despite robust demand for renewable technology.
Anders Schelde, chief investment officer at Danish fund Akademikerpension, said market conditions in offshore wind needed to be reset in order to make the sector profitable again.
Denmark’s Vestas, the world’s top maker of wind turbines, said it returned to an operating profit in the final quarter of last year, but it suspended its dividend and its CEO warned challenges would continue to weigh on the sector in 2024.
Shares in Siemens Energy and Vestas were up 1% and 5% respectively, while those in Orsted, the world’s biggest offshore wind project developer, fell in the wake of its capital markets day.
Orsted announced a portfolio review as well as job cuts following major writedowns on delayed U.S. projects.
The Danish group said it aimed to slash fixed costs by 1 billion Danish crowns ($144 million) by 2026, which would include 600-800 job cuts globally, flagging around 250 redundancies in 2024 as part of the review.
“In order to improve our competitiveness, ensure value creation, and ensure our ability to attract capital to the renewable build-out, we will make Orsted a leaner and more efficient company,” CEO Mads Nipper said.
($1 = 0.9288 euros)
($1 = 6.9260 Danish crowns)
Reporting by Christoph Steitz, Stine Jacobsen and Jacob Gronholt-Pedersen; Editing by Jason Neely and Mark Potter
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