The dream of green energy from the air, with the installation of offshore wind farms, is proving to be a dream-nightmare at an increasing rate, both for the states that see themselves confronted with new problems from their installation, but also for the companies themselves that from promising start-ups are transformed into seriously ailing businesses that cannot withstand the high costs, the shortcomings in the supply chains and after leaving many projects half-finished or on paper, they end up either collapsing or on the verge of collapse.
The first category includes the purely German Senvion and the second the German-Spanish Siemens – Gamesa, which if the unfavorable scenarios are verified will follow in the footsteps of the Danish Orsted, which recently collapsed with a bang!
The case of Siemens Gamesa
The case of Siemens Gamesa, one of the most important companies in the field of wind turbine and renewable energy construction worldwide, is extremely interesting.
It started off with a bang, taking advantage of the fall of Senvion, but in recent years, especially since 2020, the company has been facing serious financial problems, significant losses that led it to restructuring, reassessment of strategy and significant losses in the market, and since 2022 it has not managed to complete a single project!
Siemens Gamesa is the result of the merger of two major players in the renewable energy sector: Siemens Wind Power (a subsidiary of Siemens AG) and Gamesa Corporación Tecnológica, a Spanish company specializing in the manufacture of wind turbines. The merger took place in 2017 and created one of the largest players in the global wind energy sector.
The company, with a global presence and supply of wind turbines in more than 90 countries, was undertaking major projects and participating in major wind energy development initiatives. From 2017 to 2020, Siemens Gamesa was considered a leader in the global market, with significant orders and renewable energy programs.
The economic crisis and the causes of the decline
However, it has not completed any projects since 2021 – 2022. The first sign of serious problems for Siemens Gamesa came in 2020, when the company announced that it would face a lower-than-expected net profit for the following year.
Following the announcement, the company issued warnings about production problems and delays in order delivery. Let’s look at the key points that led to Siemens Gamesa’s financial crisis:
1. Increased production costs
Siemens Gamesa faced increasing production costs due to rising raw material prices (such as steel and rare earths for wind turbine magnets). These costs affected the company’s ability to keep its product prices competitive in the market.
2. Delayed projects and supply chain problems
Some major projects, particularly in the offshore wind sector, experienced delays due to supply chain problems and the COVID-19 pandemic, which caused disruptions in the production and delivery of components. Delays in project completion led to financial losses and difficulties in program management.
3. Need for restructuring and cost containment
The company announced the need for restructuring in order to reduce costs and focus on the most profitable areas of the wind industry.
In particular, the company focused on upgrading and optimizing offshore projects, as well as developing new technologies for wind turbines with greater power and greater efficiency.
4. Exit from competitive markets
Siemens Gamesa exited some international markets or limited its presence in some markets due to increased competition from other major players in the sector, such as Vestas and GE Renewable Energy. This had a negative impact on the company’s revenues and contributed to the decline in profitability.
Reactions and restructuring efforts – The impasse in recent years
The company reacted by improving technology and investing in new products.
In particular, it focused on developing higher-power wind turbines for offshore projects, such as the Siemens Gamesa SG 14-222 DD with a capacity of 14 MW, which was designed to meet the requirements of the large volume of energy required by the industry.
In addition, Siemens Gamesa continued to develop cooperation with governments and organizations, looking for ways to boost production and investment in renewable energy sources. In an effort to reduce losses and reset its strategy, the company announced investments in new production and research and development (R&D) units to remain competitive in the market.
Siemens Gamesa has found itself in a difficult position in recent years, as its financial situation and problems in the management of some projects have led to significant delays or even the abandonment of some important projects.
Despite its reputation as a leader in wind turbines, some of the company’s projects have been mired in uncertainty, which has led to backlash from customers and local governments.
Projects that Siemens Gamesa has either abandoned or failed to complete, either due to financial difficulties or technical issues.
1. Jaisalmer Wind Project, India
Siemens Gamesa had agreed to supply and install wind turbines for the wind power project in Jaisalmer, India, which promised to deliver significant energy efficiency. However, the project was problematic, with the company experiencing delays in delivering and installing the wind turbines due to systems and technical difficulties encountered in the area.
Despite the initial agreement, the completion of the project was significantly delayed and Siemens Gamesa found itself in a difficult position regarding its contractual obligations. It is trying to complete it but the pace is hopelessly slow. Start: 2017 Pause: 2020-2021
2. “Wasserstoff” (Hydrogen Wind Project): The Largest Wind Farm in Germany
One of Siemens Gamesa’s most ambitious projects was the Hydrogen Wind Project in Germany, which aimed to integrate wind power generation and hydrogen to reduce carbon dioxide emissions. Despite initial promises and a positive image of the project, the program faced many technical difficulties and delays in implementation.
Delays in the delivery of wind turbines and problems in the supply chain for the production of new hydrogen technologies seriously delayed the completion of the project.
Some aspects of the project were put on hold until solutions to the financing problems were found. Start: 2019 Stop: 2021-2022
3. Atacama Desert Wind Project, Chile: The troubled project
Siemens Gamesa has undertaken large wind projects in South America, mainly in Chile. However, in 2020, the company faced serious problems in the country. The project in the Atacama Desert region faced problems with the installation and maintenance of the wind turbines.
In addition to the technical problems, there were also delays due to the COVID-19 pandemic, which delayed work at production facilities and in supply chains. Although Siemens Gamesa has been in discussions to restructure the construction of the project, completion remains uncertain and continues to be slow. Atacama Desert (Chile) Start: 2017 Stop: 2019-2020
Projects that were permanently abandoned…
1. Akita Offshore Wind Farm, Japan: Abandoned
Japan has become one of the most important markets for Siemens Gamesa, with the offshore wind project being of particular importance. However, the company has faced serious difficulties with financing and excessive demands from Japanese stakeholders, delaying or abandoning the implementation of large offshore wind farms
Siemens Gamesa has been unable to secure the required financing and the delays have brought new financial pressures. Akita Offshore Wind Farm (Japan) Start: 2018 Abandoned: 2020-2022
2. Pacific Wind Farm in Australia
Siemens Gamesa had been responsible for supplying wind turbines for the wind farm in the Pacific. The project has been severely delayed due to financial and administrative problems affecting Australia, and in 2020 the company was forced to suspend the production process, although it was agreed to restart the project in 2021 with a reduced number of units. Start: 2019 Stop: 2020
Projects completed by 2022
1. Horns Rev 3 (Denmark) – 2021
A major project completed was the Horns Rev 3 offshore wind farm in Denmark, which was developed in collaboration with Siemens Gamesa and includes 49 SG 8.0-167 wind turbines. This project was a milestone in the wind energy sector, providing energy for approximately 400,000 households.
2. Offshore Project “East Anglia One” (United Kingdom) – 2022
The East Anglia One project, in the offshore wind energy sector in the United Kingdom, was one of Siemens Gamesa’s most ambitious projects, however there were serious delays.
Siemens Gamesa was contracted to supply the turbines for the project, but faced delays in the production of the necessary components and delivery times. This delay brought the project to a standstill for months, resulting in tensions with the UK authorities and other key industry partners. Started in 2016, suspended in 2020, restarted in 2021 and completed in 2022.
3. Assel Valley Wind Farm (USA) – 2022
Siemens Gamesa installed Siemens Gamesa SG 4.5-132 wind turbines at the Assel Valley Wind Farm in California, which is one of the company’s largest wind projects in the United States. The project included the installation of 75 units and contributes to the region’s energy transition.
4. Moray East Offshore Wind Farm (United Kingdom) – 2022
The Moray East offshore wind farm in Scotland, which had started operations in 2021, was completed and fully activated in 2022.
Siemens Gamesa contributed with the supply and installation of 100 SG 8.0-167 wind turbines to boost the overall production of the farm.
5. Osterild Wind Farm (Denmark) – 2022
Siemens Gamesa completed the assembly and installation of 35 Siemens Gamesa SG 14-222 DD wind turbines at the Osterild offshore wind farm in Denmark.
This project was significant, as this particular wind turbine unit has the capacity to produce large amounts of energy, making it one of the company’s most powerful projects in the offshore wind sector.
2025 found the company struggling to make up for the losses of previous years. However, this is not easy, nor is it guaranteed to reduce losses, at a time when the US under President Trump has made rational energy policy and the diversification of energy security with a focus on hydrocarbons its banner.
The Case of Senvion – One of the First Green Companies and One of the Most Successful Failed!
Founded in 2001 in Germany, Senvion quickly became one of the leading companies in the wind energy sector.
It specialized in the construction of wind turbines for onshore and offshore projects, and was present in many international markets. By 2015, the company had achieved significant growth and had become a major supplier in the renewable energy sector, with 80% of its sales coming from international markets.
Strategy and Initial Development Plans
Senvion’s strategy was based on the development of high-performance wind turbines for different environments. The company focused on producing products for low-wind speed areas, as well as for offshore projects, which required higher technology.
The company developed the MM100 technology for low wind speeds, and more recently the 4.2M140 for offshore applications, which secured Senvion a place in the large wind farm market.
The Financial Crisis and Bankruptcy
From 2017 onwards, Senvion’s course began to take a negative turn. The company was the victim of a series of economic and business difficulties that led to major financial problems.
Management and Strategy Issues
Senvion has been the victim of poor strategy and internal disagreements over its growth. Despite its strong global presence, it has failed to adapt quickly to changes in the industry. Delays in developing innovative products, as well as supply chain issues, have left it behind the competition.
Financial Struggles
Senvion has struggled with rising production costs and an inability to maintain profitability. In 2018, the company reported a 19% drop in revenue compared to the previous year. The consecutive declines in profits and the inability to regain investor confidence have led to serious financial crises.
The Growth Strategy That Didn’t Lead to Stability
The company had planned to focus on new markets, such as the US and India, but its expansion efforts have not yielded the expected results. Senvion said that delivery delays, increased costs and intense competition in new markets have had a negative impact on the business.
The Bankruptcy
In April 2019, Senvion filed for bankruptcy due to its inability to meet its debts. The company had failed to renew its financing and secure the necessary support from investors.
Despite efforts to restructure and sell the company to new buyers, it was unable to regain its position in the market.
The Impact of the Bankruptcy
Senvion’s bankruptcy had serious consequences for the wind energy sector and its employees.
- Several large orders, especially for offshore projects, remained unfulfilled, and many of the company’s employees were left without work.
- Despite efforts, the company was unable to find a new investor or buyer to take over its activities.
- Senvion’s failure was a serious blow to the wind energy market, which had already started to show signs of increased competition.
- Large companies such as Vestas, Siemens Gamesa and GE Renewable Energy took advantage of Senvion’s failure to strengthen their dominance in the sector, as the company was one of the leaders in the wind energy sector in Germany and internationally, until its bankruptcy in 2020.
The beginning of the end for the “RES industry”?
If Siemens Gamesa does not recover, it will join the list of bankrupt companies behind Solyndra (in 2011), Senvion, recently Ørsted and other smaller ones in between.
The recent collapse of the huge Orsted in particular reflects the crisis of the entire “green industry”, which for years has been mainly supported by state subsidies and political support — especially from the Democratic Party in the US and Brussels in the EU.
The example is dangerously reminiscent of the case of Solyndra, the American solar energy company that went bankrupt in 2011 after receiving millions in state aid.
And all this comes at a time when the Trump administration is reinstating the doctrine of “rational energy policies”, emphasizing energy security and the diversification of energy sources – with natural gas, coal and nuclear power once again in the spotlight.
