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Today we’re checking in on challenges at Siemens Energy as they scale up wind production. Let’s get in to it.

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Wind Turbine Goes Brrr

At least it’s supposed to.

This week, Siemens announced that they royally messed up their wind turbine production and they’ll need to spend over a $1 billion dollars in the next few years to fix technical faults.

In response to the news, Siemens Energy stock fell over 35%!

In theory, wind energy’s pretty simple.

You take a big fan, the wind makes it move and that movement spins a generator. Like magic, you’ve got electricity.

Of course they cost money, require land, and are dependent on the wind (duh!).

However, it’s clear that wind will play its role in our green energy transition, so what’s up with Siemens?

Flawed Fans

One of the biggest benefits of wind is in its simplicity. Siemens, as one of the world’s largest producers of wind turbines, has turned this process in to a massive business.

Despite this, their latest models of turbines (both on-shore and off-shore) have faced a number of challenges.

1. Recurring quality control challenges in rotor blades and bearings

2. Inability to ramp up skilled personnel for off-shore installations

3. Delays with permitting

To give you an idea of the scale of the challenge, Siemens Energy has 17 billion euros of pending orders that they are expecting to complete. When you scale a relatively simple process to such a large scale, there’s clearly some challenges you have to overcome.

Siemens has a lot of work to do from improving its R&D and quality assurance, to improving its talent strategy and working with regulators to speed up permitting processes.

It’s the quality issues that have grabbed the headlines but there’s a number of lessons for upstarts in the public company’s woes - here’s hoping we can turn things around and get those fans out in time.

‘til next time.

The Strawman