Sometimes it’s funny how coming across an article will make you smile because of a memory triggered by some aspect of it. That happened yesterday, and again today, when I came across these pieces on the chaos in the wind turbine manufacturing sector.
My Daddy, after being summarily booted from the Marine Corps in their post-Korean War downsizing, went on to fly for Eastern Air Lines for 30-plus years. He was the loveliest person, a natural in the cockpit (soloing in an Indiana cornfield at the age of 12), and dearly loved truly awful puns. “Wind turbines” reminded me of one of his most excruciating funnies and the first time he sprung it on us:
Daddy: There was a horrible accident at work – a stewardess backed into a turning propeller!
Family: OMG! How is she?!
GROAN Still cracks me up.
Absolutely apropos for the situation spinning in the turbine industry, only they didn’t back into it by mistake – they ran into it full tilt, with their corporate hands out. Now the entire industry is hitting headwinds they hadn’t counted on and it could spell disaster.
The European wind industry has warned of continued difficulties in 2023 as high materials costs and slow approvals for new wind power projects drag back profitability, despite rising demand for renewable energy.
…The effects of the Russian war on Ukraine drove up prices for energy and important raw materials such as steel last year, creating a perfect storm for the European wind sector.
Despite escalating demand from governments and customers for renewable energy as a result of the energy crisis, the slow EU and UK approval processes have created a backlog of projects and delayed new turbine orders.
German manufacturer Siemens Gamesa, one of the premier turbine providers in the renewables game, reported an almost billion-dollar loss for the Oct-Dec quarter of last year! So guess what they want?
Global green energy company Siemens Gamesa reported Thursday that it had lost a staggering $967 million during the three-month period from between October to December.
The Germany-based company, which dubs itself as “the global leader in offshore power generation,” noted the wind industry has faced various unfavorable pressures leading to negative growth in recent months and years, in its earnings report for the first quarter of fiscal year 2023 released Thursday morning. The company added that governments would need to further assist the industry to ensure future positive growth.
If you guessed “a bailout,” you’re right!
What isn’t in that report was another season for the disastrous returns – they make a crappy product? Their loss doubled because of warranty claim payouts.
Beleaguered wind turbine maker Siemens Gamesa (SGREN.MC), soon to be delisted and folded into parent Siemens Energy (ENR1n.DE), said on Thursday its first-quarter net loss more than doubled on higher warranty provisions as a result of faulty components.
…The company last month flagged increased failure rates of unspecified components of its installed onshore and offshore wind turbines, triggering higher warranty provisions that have also plagued Danish rival Vestas (VWS.CO).
“The negative development in our service business underscores that we have much work ahead of us to stabilize our business and return to profitability,” said Siemens Gamesa Chief Executive Jochen Eickholt, who joined from Siemens Energy last year.
It sounds like the Danish company Vestas isn’t exactly a sterling production model either. Their warranty claims exceeded their revenue target (am I reading that right?)?
Don’t you find it odd that they are having demonstrably terrible problems with faulty products and hardly a peep about any of it in the mainstream cheering for wind? There seems to be a concerted effort to hide the reliability of these products from the get-go in the hype and renewable raptures.
You (say, Siemens, for example) get a reputation for overpriced junk – no matter how subsidized it is, your order sheets will start reflecting your reputation.
Apologies — typo above. It should read (€ per MW)
— Javier Blas (@JavierBlas) February 2, 2023
And an order backlog like this – not a single order for the first quarter of ’23 – isn’t going to pay the bills.
Here in the U.S., General Electric was humming along in its financials except…*sad trombone*…when it got to their turbine business. Ooo, they took a hit, too. Really fugly numbers.
…The company’s renewable energy business has been facing challenges due to inflation and supply chain pressures. The unit reported a loss of $2.2 billion in 2022.
GE is reducing global headcount at the onshore wind unit by about 20% as part of a plan to restructure and resize the business.
What a surprise. Look who GE is counting on to save the windy day! Tax credit bailout.
…Culp said the onshore business is expected to get a boost following the restoration of the tax credit for wind projects.
It’s not just manufacturing, although their woes are feeding into these problems. Offshore wind projects that were touted as saving the world just a few months ago are on shaky pedestals. The company that is fighting off accusations of whale killing for the prep work going on off the New Jersey coast has just taken a massive write-off on a project underway in the waters off New York state.
…Denmark’s Orsted (ORSTED.CO), the world’s No. 1 offshore wind farm developer, late on Thursday announced a writedown on a large U.S. offshore wind project and an earnings forecast for 2023 that fell short of analyst estimates.
…Orsted shares tumbled by more than 7% on Friday after it announced a 2.5 billion Danish crown ($366 million) writedown on its Sunrise Wind project off the coast of New York, citing changes to its earnings projections.
It said earnings at the prices it had agreed for the project – due to become fully operational in 2025 – will be squeezed by significant inflationary pressures and higher interest rates now faced across the sector.
In an interesting turn of events in New Hampshire, a company contracted with the state for an offshore wind farm is embroiled in a major tussle with the state’s department of utilities. Avangrid has told the state they can’t afford to move forward, so “we’re not building it anymore.”
The developer behind the largest single offshore wind farm in the state’s pipeline on Thursday filed a formal notice of appeal to contest the Department of Public Utilities’ approval of contracts that the developer agreed to but says will no longer allow its project to be financed or built.
The DPU last month determined that the contracts, which the wind developers and utility companies agreed to in May, “are in the public interest” and approved them over the developer’s objections. Commonwealth Wind parent company Avangrid has said for months that increases in commodity prices, rising interest rates and supply shortages mean that its 1,200 megawatt renewable energy project “cannot be financed and built” under the terms of those power purchase agreements (PPAs).
Good luck working around all that.
Sounds like they need a bailout! But, why should we?
"[Siemens] needs to further fleece taxpayers globally to stay profitable."@SteveGruberShow reports on a story proving that green energy from wind turbines is not profitable.
— Real America's Voice (RAV) (@RealAmVoice) February 3, 2023
Renewables have had plenty of time and bazillions of tax dollars already to stand on their own. We are all dealing the same inflationary pressures and Ukraine, etc – they aren’t suffering any industry peculiar hardships other than the fraud the “Green” industry is founded on.
Time to kick those tax training wheels out from under these bad boys and see how they twirl.
Do they spin happily into the sunset or…like I’m bettin’…does it fall to Earth in a flaming disaster?
Keep an umbrella handy.