Siemens Energy Looks to Delay Turbine Orders During Probe

Siemens Energy AG is trying to delay delivery of new wind turbines from its troubled 5.X platform by as much as seven months as the company races to contain the fallout from flaws in its machines, according to people familiar with the matter.

(Bloomberg) — Siemens Energy AG is trying to delay delivery of new wind turbines from its troubled 5.X platform by as much as seven months as the company races to contain the fallout from flaws in its machines, according to people familiar with the matter.

The company is still trying to determine the breadth of technical problems and how to fix them, said the people, who asked not to be identified discussing private information. A key part of the review is focused on the extent to which the issues stem from suppliers or the turbines’ design.

If deeper design flaws are discovered, the cost of repair could soar well beyond the roughly €1 billion ($1.1 billion) Siemens Energy originally estimated. The company is set to present an updated cost estimate for fixing the turbines when it releases third-quarter results on Aug. 7.

Siemens Energy said it “naturally” sought to eliminate possible problems before delivery, which may trigger slight delays in some cases. The shares turned negative after the news and fell as much as 1.4%, taking losses this year to 11%.

Turnaround Effort

The string of quality problems with installed and uninstalled turbines have opened a new chapter in Siemens Energy’s efforts to turn around long-standing issues at its Spanish wind-power subsidiary Gamesa. The company is now under pressure to provide answers after disclosing the flaws last month set off a record drop in its share price.

Engineers from the company have met with customers in recent weeks to propose possible fixes, two people said. Some of the potential measures would involve temporary fixes that may have to be revised with more permanent solutions later, one of the people said.

The internal task force has already identified issues in three different areas of its 4.X and 5.X platforms: rotors, gearboxes and a piece of the turbines’ frame, one of the people said.

The special supervisory board committee, which meets every two weeks, has begun selecting external technical advisers to support the internal task force.

–With assistance from Rodrigo Orihuela.

(Updates with share move in fourth paragraph)

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.