While wind turbine manufacturers’ margins have been eroded by external factors — such as the introduction of auctions, global trade tensions, and the disruption caused by COVID-19 — the long-term outlook for wind power is very favourable. According to the International Energy Agency (IEA), renewable energies will account for more than 50 percent of the global capacity mix in 2040 and wind is expected to attract the highest investments in that period, according to BNEF. Strong growth is expected in particular in the Offshore and Services markets over the next decade, while demand in Onshore will remain solid. Additionally, prospects are expected to be buoyed by the emergence of green hydrogen technologies in which SGRE expects wind to play a key role.
“Public and government demand for clean energy solutions to climate crisis will drive continued investment in renewable electricity generation and we are well positioned to deliver value to shareholders and society by playing a full role in that process” said Andreas Nauen, CEO of Siemens Gamesa. “It has been a tough period for the industry and the company, but I am confident we have all the right components in place. Our people, technology, scale and global footprint are strong foundations on which to build a long-term industry leader. We have a strong profitable competitive position in the growing Offshore and Services markets, and there is very significant potential in our Onshore business that we will realise through the turnaround process now underway. A new management team has been appointed to lead the turnaround. Additionally, through our new core shareholder, Siemens Energy, we will be part of an energy powerhouse, and we expect to be able to benefit from strong synergy potential.”
With the goal of achieving long-term success, the company presented its LEAP acceleration programme, at the heart of which is digitalisation and sustainability as enablers and differentiating factors.
Onshore industry forecasts predict stable long-term demand for wind power, with estimated high level of annual installations of 55 GW through 2025 growing to more than 65 GW in 2030. Siemens Gamesa has defined a clear roadmap to return the business to sustainable profitability, leveraged on the LEAP programme and focused on prioritising profitability over volume, as well as reducing the risk profile of the business model.
To drive this necessary turnaround, the company will also focus on delivering leading competitive technology, including the 5X platform, reducing the complexity of its supply chain and rightsizing the structure. Some of the measures are already under way, such as the achievement of the first orders of the new product platform, the initiation of restructuring measures in India and the adaptation of the manufacturing footprint to demand in EMEA. The onshore market, with strong fundamentals, remains core for Siemens Gamesa and the company is committed to deliver sustainable profitability in the business.
The Offshore segment is expected to achieve strong growth in current European markets but also in new emerging markets globally such as Taiwan or the United States. On the back of this growth potential, installations of more than 180 GW are expected between 2020 and 2030. To capture this global market growth and reinforce its lead in the industry, Siemens Gamesa will continue to develop its technology, delivering innovative solutions, such as the new SG14-222 DD turbine. Together with the market, SGRE will also globalise its offshore operations in close collaboration with its customers and will maintain execution excellence as a key pillar to maintain its profitable leadership position.
SGRE is also well positioned in the Service segment, which is projected to achieve 8 percent CAGR through 2025. The company plans to outstrip the market maintaining strong profitability through continuous innovation and developing new business models including digital solutions while maintaining stringent focus on productivity and operational excellence. The company intends to address its own as well as multi-brand fleet opportunities leveraging on the recent acquisition of selected Senvion assets.
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