Page 5 - AsiaElec Week 44 2022

AsiaElec COMMENTARY AsiaElec

offshore wind momentum, with preferred sup- Western wind turbine original equipment
plier agreements totalling 3.8 GW across the manufacturers are struggling with thin profit
US, United Kingdom and Poland, while onshore margins because of cost inflation – such as for
order intake was 1.9 GW with an average selling commodities like steel, logistics and labour. Also
price of €1.06mn/MW, ensuring a high order contributing to the headwinds are increasing
backlog of €18.1bn. competition from China and policy uncertainty
“The energy crisis incentivises a faster tran- in the wake of the energy crisis because of Mos-
sition to an energy system built on renewables, cow’s invasion of Ukraine.
and ambitious political agreements such as the A few days before Vestas reported its finan-
Inflation Reduction Act in USA strengthen cials, GE had said that its renewables division’s
the underlying demand for wind energy solu- annual losses in 2022 would reach $2 bn, and
tions, but project development and order intake the company confirmed that it would axe 20%
remain impeded by energy market uncertainties of onshore wind jobs because of rising costs and
and red tape,” he said. policy uncertainty, officials said. CEO Larry
The company also said that it will increase its Culp said that the job cuts would occur in the
operating earnings in 2025 by 10% by raising its next 12 months and would involve cuts at the
turbine prices even more than it has already. division’s headquarters.
It received orders for nearly 1.9 GW of tur- GE’s largest onshore wind market, the US,
bines between 1 July and 30 September, leaving has experienced uncertainty as government tax
it with an order backlog worth €18.1bn at the credits for wind energy production have expired.
end of the period. The order intake has been This was a large part of the cause of GE’s 15% y/y
projected to be 2,482 MW. drop of revenue in its renewable energy division
Longer term, the company is relatively opti- in Q3.
mistic. Chief financial officer Hans Martin Smith Rival Siemens Gamesa (SG) will report its
told Reuters: “I think it is evident that the world earnings on November 10. They will be watched
needs more renewable energy and I think that’s closely. The Spanish company has issued profit
what everyone is expecting.” warnings and said in late September that it will
Notably, Vestas did not report job cuts, axe 2,900 jobs globally because of inflation and
though analysts say it may have to do so before supply chain issues. The pressures are affecting
too long. its bottom line, SG said.™

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