Guest essay by Eric Worrall
h/t Net Zero Watch; Shareholder Fury: According to FT, the disastrous financial losses in Siemens’ wind power unit are a threat to the financial credibility of the entire company.
Siemens Energy’s struggling wind unit blows Germany’s largest spinout off course
Investors quiz management after four profit warnings in 18 months
Joe Miller in Frankfurt
Even as groups of teenagers routinely protested against climate change in the streets below his Munich office, Christian Bruch struck a defiant tone.
“Everybody is looking for a silver bullet which . . . makes [energy] sustainable overnight,” Bruch told the Financial Times in the summer of 2020, as he prepared to take charge of Siemens Energy. “[But] over the next decades we’re going to need natural gas.”
His unfashionable stance failed to cut through to investors. Weeks later, against the backdrop of a resurgent Green party, Siemens Energy slumped on its stock market debut in Frankfurt after becoming Germany’s largest ever spin-off. Those who did invest in the fossil fuels company were more attracted to its sole clean energy business — the rapidly growing Spanish manufacturer of wind turbines, Siemens Gamesa, or SGRE.
Yet it is this renewables unit — rather than the gas and coal contracts that make up the bulk of Siemens Energy’s balance sheet — that now threatens the company’s future and is causing headaches for its largest shareholder, Siemens.
SGRE’s problems reverberate beyond Siemens Energy’s boardroom. They have raised doubts among executives as to whether European and American companies can compete in the wind energy sector, or whether, as with solar, they will eventually be undercut by cheaper Asian imports.
…Read more: https://www.ft.com/content/1901cc04-8fa9-48c7-a499-6b5bbc78cfe6?fbclid=IwAR0anG9pYI1p2Vruc7Gg-67rx1qVAJYNQghFNOr4a5cf3EjV3EbtHTjtYSY
There is an obvious explanation for why Asia is undercutting European manufacturing so badly – the Chinese economy is powered by coal.
Siemens and other big European manufacturers face an increasingly impossible disadvantage vs Asia, because of skyrocketing European energy prices. European energy prices are skyrocketing largely because European countries have embraced wind turbines and solar panels manufactured by the likes of Siemens.