Siemens Gamesa and parent Siemens Energy have established a taskforce to resolve problems in the former’s onshore wind business, which are set to cost an additional €1bn-plus to resolve.
A team of experts has been set up and will be supported by AlixPartners, a consulting company specialising in the effective handling of complex projects.
The issues related to certain blades and main bearings on a “limited number” of 4.X and 5.X turbines, Siemens Energy said as it released third quarter results.
“The turbines can still be operated, but to ensure a long-term runtime, the aim is to rectify the problems within the normal service intervals,” it said.
“The expected costs for remedying the quality problems have been considered in the third quarter, with charges for future expenses amounting to €1.6bn. The immediate liquidity outflow in fiscal 2023 is low. The main part of the expected repair costs is expected in fiscal 2024 and 2025.”
In addition, the company said it expects higher product costs in offshore of around €600m, booked in the third quarter.
This related to “projects already committed to contractually cannot be completed profitably if implemented by the customer”.
There are also further “ramp-up” challenges.
The company also faces a write down of deferred tax assets of around €700m.
“Due to the developments at Siemens Gamesa, Siemens Energy is reviewing the current strategy and action plan in the wind business. Details of this strategic plan will be presented at the Capital Markets Day in November,” it added.