Siemens Energy shares plunge more than 37% as wind turbine worries deepen
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Siemens Energy shares plunge more than 37% as wind turbine worries deepen


  • Siemens announced late Thursday that a review of wind turbine failure rates at its subsidiary Siemens Gamesa revealed a “substantial increase.”

  • Siemens Gamesa has initiated an “extended technical review” which will cost more than 1 billion euros ($1.09 billion) than previously estimated.


The shares of Siemens Energy fell over 37% on Friday after the company scrapped its profit forecast and warned of long-term problems with its wind turbines.

After reviewing the failure rates of wind turbine components at Siemens Gamesa, the former gas and power division of German conglomerate Siemens announced late Thursday that the failure rates had increased substantially.

A Siemens Gamesa board has initiated an “extended technical review” aimed at improving product quality. The parent company estimates the cost will exceed 1 billion euros ($1.09 billion), which is considerably higher than previously estimated.

Siemens Energy said in a statement that it is too early to estimate the potential financial impact of the quality topics and the impact of the review of its assumptions on its business plans.

We have therefore withdrawn the Siemens Gamesa profit guidance for fiscal year 2023, based on our preliminary assessment as of today, due to the potential magnitude of the impact.”

Following its full takeover late last year, Siemens Gamesa has been a headache for its parent company.

Simen Energy AG

Christian Bruch, Siemens Energy CEO, told journalists on a conference call Friday that “too much had been swept under the rug” at Siemens Gamesa, and quality issues were “more severe than anticipated.”

The scale of Siemens Energy’s problems has shocked the market, according to Alliance Bernstein’s Nicholas Green, head of European capital goods.

“There is a 17 billion euro service order book and the company is delivering service on wind farms and wind turbines for quite a number of years ahead — five years ahead, sometimes 10-year contracts — and if you discover that some of your components don’t work as you intended, maybe you’ll have to replace those components, that’s a huge liability you’re taking on,” he said.

Green said that there is still a “slight question mark about where the liability ends” in Siemens Energy’s installed fleet of turbines. Siemens Energy estimates that component failures affect 15% to 30% of its installed fleet.