The leading global wind power developers and turbine manufacturers – Orsted, Siemens Energy, and Vestas – have cautioned that the challenges faced by the industry in 2023 are expected to persist into 2024.
As a result, the companies have decided to suspend dividends as they focus on returning to profitability and reducing costs.
The wind industry, particularly offshore wind, encountered difficulties in 2023, including cost escalations, rising interest rates, turbine quality issues, and project delays and cancellations.
Despite entering the new year, OilPrice.com reports that the three companies anticipate ongoing losses and uncertainty.
Orsted, the world’s largest offshore wind project developer, announced a suspension of dividends for the financial years 2023 through 2025, with plans to reinstate dividends from 2026.
The company reported a net loss of $3 billion (20.2 billion Danish crowns) for 2023, largely attributed to impairments on its U.S. offshore projects.
To address sector challenges, Orsted will implement cost-cutting measures, including reducing fixed costs and eliminating 600-800 positions globally.
CEO Mads Nipper emphasized the company’s focus on becoming leaner and more efficient to enhance competitiveness and attract capital for renewable energy expansion.
Vestas, the world’s leading wind turbine manufacturer, also announced the suspension of dividends for 2024.
Henrik Andersen, Group President and CEO, highlighted geopolitical volatility and regulatory hurdles as factors contributing to anticipated uncertainty in 2024.
Siemens Energy anticipates its wind turbine-making unit, Siemens Gamesa, to report a loss of $2.16 billion (2 billion euros) for 2024.
The company’s free cash flow pre-tax for 2023 was negative, primarily attributed to Siemens Gamesa’s challenges in the onshore wind business.
Christian Bruch, president and CEO of Siemens Energy AG, reiterated the company’s commitment to addressing quality issues in the onshore wind sector while capitalizing on growth opportunities in other areas of the business.
Overall, the three major players in the wind power industry are taking proactive measures to navigate ongoing challenges and position themselves for future growth and profitability.