The federal government wants to help
Siemens Energy wants state guarantees – and is receiving criticism
October 27, 2023, 2:50 p.m
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The Siemens group wants guarantees from the federal government for its struggling subsidiary Siemens Energy. The company sees this as important for the transformation in Germany and wants to negotiate. IFO boss Fuest really dislikes this. From his perspective, someone else is responsible.
The federal government has confirmed talks with the ailing energy technology group Siemens Energy. The government is “in intensive discussions” with the company, said a spokeswoman for the Federal Ministry of Economics in Berlin. She did not want to comment on details.
Deputy government spokesman Wolfgang Büchner added that the federal government is aware that Siemens Energy is “a company that is relevant to the transformation of Germany as a business location.”
IFO President Clemens Fuest criticizes the possible state aid for Siemens Energy. “There is no convincing justification for the state to support Siemens Energy financially or with guarantees,” the top economist told the Reuters news agency. “The support means a transfer of tax money to the creditors and shareholders of Siemens Energy, who should actually be liable. It is the task of the creditors and shareholders to restructure the company and waive their claims.”
After that, the production of wind turbines could continue, added the head of the Munich research institute. “Incidentally, wind turbines can also be imported from other countries if Siemens Energy were to stop production. Self-sufficiency in this area is unnecessary and not necessary for the energy transition.”
Double-digit billion amounts under discussion
Siemens Energy announced on Thursday that it was negotiating guarantees for major projects with the federal government. The background is high costs due to quality problems at the wind turbine subsidiary Siemens Gamesa. According to media reports, it is about up to 15 billion euros.
Siemens Gamesa is one of the largest wind turbine suppliers in the world, but has been recording high losses for a long time. After several years as majority owner, Siemens Energy took over the subsidiary completely in 2022 in order to be able to take better action.
In addition to the specific problems that Gamesa is struggling with, there is a difficult market environment for the European wind power industry in general: despite the growing demand for clean energy, the sector is suffering from higher material prices, ongoing disruptions to supply chains – and, last but not least, strong price pressure from the Competition from China.