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Wind power giants give bleak view of coming year as challenges persist

Siemens expects to lose money, Orsted is cutting job and, along with Vestas, scraps its dividend

Project delays, equipment issues and inflation are all contributing to a challenging outlook for the wind power sector. Photograph: Steve Helber/AP

Wed Feb 7 2024 - 09:18

The world’s three biggest wind power groups on Wednesday gave a sober view of the year ahead, citing ongoing challenges in the maturing sector that continues to suffer from project delays, equipment issues and inflation.

Siemens Energy, the world’s largest maker of offshore wind turbines, expects a 2024 loss before special items of around €2 billion at its troubled wind division Siemens Gamesa, where quality problems at some onshore models have caused a major crisis.

Rising prices for components and regulatory delays have caused writedowns and losses across the industry despite robust demand for renewable technology.

The challenges will continue, according to Henrik Andersen, chief executive of Denmark's Vestas, the world's largest maker of wind turbines.

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"Continued geopolitical volatility as well as slow permitting and insufficient grid build-out across markets are expected to cause uncertainty in 2024," he said as the group scrapped its dividend and posted better-than-expected fourth-quarter results.

Ørsted, the world’s biggest offshore wind project developer, also responded to the sector’s ongoing woes, announcing a portfolio review as well as job cuts following major writedowns on delayed projects in the United States.

The company said it would “pause” dividends for 2023-2025 and retreat from markets in Norway, Spain and Portugal as it looks to slash fixed costs by one billion Danish crowns (€134 million) by 2026. That will include 600-800 job cuts globally, including around 250 redundancies in 2024

Ørsted will cut its target for its green power build out to a goal of 35 to 38 gigawatts by 2030, down from a previous target of 50 gigawatts, according to a statement Wednesday. Despite its woes in the US market, it said the US remained an attractive offshore wind market for the company and it was “encouraged” by the conditions offered by northeastern US states.

“In order to improve our competitiveness, ensure value creation, and ensure our ability to attract capital to the renewable build-out, we will make Ørsted a leaner and more efficient company,” Ørsted CEO Mads Nipper said. - Reuters

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