Aenert news. Energy Companies
The wind energy industry continues to face significant challenges, which inevitably impact the production and financial performance of leading wind turbine manufacturers. Previously, the epicenter of the problems was the situation at Siemens Gamesa Renewable Energy, where quality problems, a growing number of technical equipment failures, and execution of outdated and burdensome onshore projects were identified. Today, the level of problems shows clear signs of a systemic crisis. This is evidenced by the repeated failure of tender conditions for the construction of offshore wind farms. This happened, for example, in the UK, in New York, in the Gulf of Mexico, in Germany. The essence of the problem here is clear. There has been a major increase in the cost of wind energy projects and supply chain issues while maintaining fixed electricity prices. Obviously, this called into question the return on investment of projects and reduced their investment attractiveness. It is also clear that this happened primarily in the most expensive segment of offshore wind projects.
Added to this was a general understanding of the crisis in large-scale turbine construction. On the one hand, the successful launch of the MingYang Smart Energy MySE 16-260 wind generator in China in July demonstrates tremendous progress in this direction. On the other hand, manufacturers are increasingly faced with the unpreparedness of the existing infrastructure for the implementation of such projects. First of all, this concerns the shortage of installation vessels, berths, and port cranes. It is difficult to disagree with this, since today the length of the blades exceeds a hundred meters, and the mass of the nacelles reaches several hundred tons. In addition, for example, the height of the same MySE 16-260 is more than 150 meters. As a solution, experts propose to slow down the growth of wind generator power and standardize the production industry.
Goldwind is one of the largest wind power companies in the world. Total installed capacity of wind turbines of the company reached 100 GW and 49 000 turbines. The company operates in 38 countries, but its main market remains China, where it has been the leader for at least the last ten years. Goldwind have about 10,000 employees worldwide, including over 3,000 research and development (R&D) and technical personnel.
Goldwind, Revenue, net income and share price
In contrast to Goldwind's stable and highly predictable financial performance in 2020 and 2021, the current situation looks different. The entire year 2022 was characterized by a decrease in profits from quarter to quarter. In 2023Q1, profit left a near-record RMB 1,235 million, but fell to almost zero in the following quarter.
At the same time, the sales volume amounted to a considerable 4674 MW. The company's stock price fell for the fourth time in a row at the end of each quarter. Perhaps this change in the nature of financial indicators is also due to problems in supply chains that could not but affect the Chinese company. However, for a more detailed understanding of the essence of what is happening, additional time is needed.
The Danish Vestas has for many years been the largest wind energy company in the world in terms of installed capacity. At the end of the 2 quarter of 2023, the company had installed 169 GW of wind turbine capacity worldwide, or more than 18%, including more than 9 GW offshore. 149 GW wind turbines are under service. Vestas' global network covers 88 countries and is constantly expanding.
The company has not yet managed to reverse the negative financial trends of last year, although revenue in 2023 Q2 amounted to €3,305m, slightly exceeding the figures for the same quarter last year.
Vestas. Revenue, net income and share price
At the same time, the loss amounted to €115m. EBIT margin of negative 2%. Order intake in the second quarter amounted to 2.3 GW, which is much less than the figures for the previous two quarters. So in 2022 Q4 it exceeded 4 GW, and in 2023 Q1 3.3 GW. The stock market reacts poorly to the company's performance results, remaining throughout the year in the range of $150–200 per share.
GE renewable energy
General Electric Company (GE) is one of the most famous brands in the power equipment market. Its divisions include Aerospace, Renewable Energy and Power. GE Renewable Energy has more than 40,000 employees in more than 80 countries and is one of the world leaders in wind energy. The total number of onshore wind turbines alone exceeds 54,000 units. Comparative quarterly financial performance for GE Renewable Energy is shown in the chart below.
GE Renewable Energy. Revenue, net income and share price
In 2023 Q2, the company's revenues amounted to $3,849 million, which is 24% more than in the same period last year. For the sixth quarter in a row, the company recorded a quarterly loss, this time in the amount of $359 million. However, GE Renewable Energy received a strong order volume of 2.9 GW in 2023 Q2. This, as well as the rapid growth in the company's share price, inspires reasonable optimism.
Let us note a few more facts reflecting the current state of wind energy. Thus, Siemens Energy (formerly Siemens Gamesa) reported a Net loss of €2,931m (Q3 2022: Net loss €564m). Revenue increased by 8.0% on a comparable basis to €7.5bn.
The share price of the Danish company Ørsted A/S, one of the leaders in offshore wind energy, has fallen from its peak in mid-June to now by more than 30%.
By the Editorial Board