Siemens Energy posted an annual loss of $4.9 billion in its earnings report released this week. The company’s wind turbine unit, Siemens Gamesa, is primarily responsible for the poor results.
The German government is committed to ensuring that the country’s energy transition is a success. In line with this, it announced Tuesday that it will provide $8.1 billion in guarantees to Siemens as part of a $16.3 billion "rescue package."
Siemens is expected to withdraw from non-performing markets related to its wind energy business. Earlier this year, the company said it expected Siemens Gamesa to generate $2.2 billion in operating losses through 2024. Losses have been worse than expected.
Also this week, Siemens Gamesa announced that it had ditched plans to build an offshore wind turbine plant in Portsmouth, Virginia, as part of a $200 million investment.
Siemens' battle to turn its wind energy business to profit comes after a series of damaging delays in the global wind sector in recent months, as high global interest rates and persistent inflation hamper renewable energy supply chains.
What does this mean for me?
Siemens is Germany's second-biggest enterprise by market capitalization and Europe's largest industrial manufacturer. The company employs over 300,000 people worldwide.
Challenges in meeting profitability goals for the biggest renewable energy firms continue to disrupt the global push toward renewable energy sources. According to Bloomberg, some $7 trillion in total annual investment is needed to achieve worldwide net-zero carbon emissions by the year 2050.