Siemens has revealed issues within its wind turbine unit will cost billions of dollars and likely last for years.
A host of issues from the quality of Siemens Gamesa’s wind turbines to potentially loss-making contracts is set to cost €2.2 billion (US$2.4 billion), the company said on Monday.
This will lift 2023’s net losses to around €4.5 billion, Siemens added, despite Monday’s third-quarter update boasting a record order backlog of €106 billion.
“The quality problems really result from the past, but I think we have too fast rolled out platforms into the market,” chief executive Christian Bruch explained.
“That is not a cost issue per se, that is really a quality issue in terms of going too fast with new products into the market.”
Siemens supplies and provides services for companies around the world, including in the UK.
However, issues within the company’s renewable wing, unveiled in June, have prompted questions over its future, with an update expected during November’s capital markets day.
Siemens penned a deal in March to supply 95 turbines to ScottishPower’s East Anglia 3 wind power project in the North Sea, set to come online and power 1.3 million homes from 2026.
The SG 14-236 DD turbines involved are not said to be affected by the issues though, which relates to a portion of the 2,900 most recently built 4.X and 5.X models, according to the company.
Siemens was also selected to service SSE PLC (LSE:SSE), Greencoat UK Wind PLC (LSE:UKW) and GLIL Corporate-owned Clyde Wind Farm’s 54 turbines, in Scotland, until 2037 last December.
Discussing Siemens Gamesa in a call on Monday, Bruch reassured the market was strategically relevant but added a review of “all options” was currently being carried out.
Shares in Siemens were trading 0.2% lower at €148.6 on Monday afternoon.