Siemens Energy AG is exploring the possibility of developing a new turbine to replace a system that has caused significant financial losses for its wind energy business. The company is looking for ways to shore up its beleaguered wind energy division, and creating a new turbine is one option being considered.
According to sources familiar with the matter, the new turbine could be ready within two years. At the same time, Siemens Energy’s struggling Gamesa unit is focusing on salvaging its latest turbine, the 5.X, by pivoting to a new model. However, this shift would require a costly absence from the market.
Siemens Energy is based in Munich, Germany, and has been grappling with a major industrial debacle. Issues with malfunctioning turbines and unprofitable contracts are expected to result in a net loss of €4.5 billion ($4.8 billion) for the company this year. This has dealt a significant blow to turnaround efforts for its Spanish onshore wind unit, which has been unprofitable for years.
Siemens Energy has not commented on specific plans for new turbine designs but is reportedly reviewing various options to cut costs, including factory and sales office closures. The company is also working to determine the extent of necessary repairs for the 5.X turbine, which has been plagued by breakdowns.
The wind energy industry as a whole is facing challenges due to unprofitable contracts and rising raw material costs. Siemens Energy is scheduled to provide an update on its plans on November 15, and final repairs for the 5.X turbine may take until the end of the year.
Sources: Bloomberg News