Siemens Energy is prioritizing its grid expansion business over wind power, allocating some $1.6 billion (1.5 billion euro) in investments over the next six years, the Financial Times has reported.
The six-year expansion plan will require a major boost to the company's workforce with 10,000 new hires planned, the Financial Times reported.
Grid upgrades and expansion are a top priority for transition-focused governments given the fact that electrification is at the heart of said transition. Yet grid expansion is a massive undertaking in any given country, requiring a lot of workers and a lot of money.
In the United States, the upgrades and expansion needed to make the grid transition-ready have been estimated at over $2.5 trillion by 2035. For Europe, annual investments in grid upgrades have been calculated at some $73 billion, or 67 billion euros between 2025 and 2040.
Siemens Energy wants a piece of both the U.S. and the European grid upgrade pie. "We see this huge boom coming," the head of Siemens Energy's grid business, Tim Holt, told the Financial Times in an interview, citing projections of stronger electricity consumption, the buildout of new wind and solar capacity that would need to be connected to a grid that can take it, and aging grid infrastructure that needs replacing.
The plan is a shift in Siemens Energy's priorities after its wind power business dragged the company's bottom line into the red last year. Plagued by quality issues, rising costs, and ramp-up challenges in the wind business, the company booked a net loss of $5 billion for the 2023 fiscal year. At the end of the year, Siemens Energy decided to review its wind power business. Then, early this year, it said it expected its wind power business unit to post another loss, but more manageable, at an estimated $2.16 billion.
By Irina Slav for Oilprice.com
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