In the heart of Berlin, in the Moabit district, the Gasturbinenwerk (“Gas Turbine Factory”) is an imposing glass and concrete building. Its refined style is striking in its modernity. Built in 1909 by architect Peter Behrens for the industrial company AEG, the site was one of the very first places to manufacture gas turbines in the world. Now classified, it reminds us that before being a cultural and technological metropolis, Berlin was a center of German industrialization, from the 19th centurye century. Siemens took its first steps there in 1847.
Difficult to believe from the outside, the Gasturbinenwerk never changed position. Its owner, today Siemens Energy, still manufactures the famous gas turbines there, now compatible with hydrogen. In the workshops, we can observe workers working around these immense hubs bristling with nickel, titanium and ceramic blades, almost emblematic of the German industrialist.
Currently in the midst of a renaissance, this traditional activity is preventing Siemens Energy from an even more dramatic crisis than it already is. The group suffered an abysmal loss of 3 billion euros between April and June, due to malfunctions on its onshore wind turbines. For the 2022-2023 financial year, ending September 30, this loss could reach the historic level of 4.5 billion euros.
These setbacks are all the more painful as they are linked to what was to be the future of the group, wind power. Siemens Energy was born three years ago from the separation from Siemens, with the ambition of being the “Swiss army knife” of energy solutions, combining traditional activities linked to fossils with a powerful wind power pole, promised to a large future.
Industrial and financial disaster
The promise was shattered on the wall of serial failures on wind turbines. At the end of June, the group published a press release in which it recognized quality problems with onshore wind turbines already installed. The announcement caused the price to fall by almost 40%. In August, management was able to give an initial assessment of the damage: replacing components such as gears and turbine blades is expected to cost 1.6 billion euros. Added to this is an additional 600 million euros in loss of turnover, because the production of offshore wind turbines stalls.
The group’s financial assessment was downgraded by the rating agencies. For Siemens Energy, it is an industrial and financial disaster: the company has lost two thirds of its value since its IPO in 2020. And the descent into hell is not over. On Thursday morning, October 26, the price fell again by more than 39%, after the company confirmed press reports according to which it had requested help from the German state to be able to continue accepting orders.
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