German Government helps Siemens Energy get back on its feet

Over the last few days, there has been speculation in the press that the German government will provide financial support to the ailing Siemens Energy Group. It has now been announced that Germany will help out with a guarantee totalling 7.5 billion euros to get the energy division back on its feet. According to Federal Ministry of Economics, the guarantee is part of the company's guarantee lines totalling 15 billion euros, which have been agreed with private banks and other stakeholders. The Federal Government's commitment is subject to the condition that the other stakeholders make their contributions.

Siemens Energy is one of the world's leading companies for energy technologies and is highly relevant to the entire value chain for the provision of energy systems (from energy generation to transport and storage). At the same time, Siemens Energy is an important employer in future-proof industries with around 26,000 employees in Germany. Recently, however, negative reports have dominated, mainly due to the wind power subsidiary Siemens Gamesa Renewable Energy. In addition to the sharp rise in prices due to inflation and supply bottlenecks, the company's balance sheet was hit by material problems.

Christian Bruch, President and CEO of Siemens Energy, therefore summarises the last fiscal year as follows: "In a year of unprecedented challenges, Siemens Energy showed that turnarounds are achievable, with the businesses, excluding wind, meeting or exceeding their full-year targets. We are also seeing progress in dealing with the issues at Siemens Gamesa, and I am encouraged that the data from the installed onshore turbines confirm our previous findings. Our strong balance sheet remains a top priority, and Siemens Energy's vital role in the energy transition will continue to drive our growth and success in the years ahead."

The wind industry continues to be regarded as a future and growth industry, but many past mistakes, such as incorrect tendering models, expansion caps and approval backlogs, which have now had to be painstakingly corrected, are currently causing expansion to stutter.

Philipp Godron from Agora Energiewende recently explained to Capital.de that state support will not become a permanent state of affairs: "The wind industry is a growth sector that must and can sustain itself in the long term in the face of private-sector competition. It is certainly not an industry that must and should be permanently subsidised by the state, whether by the European Union or the German government. Competition is also helpful in order to ultimately achieve attractive production prices and thus favourable energy costs for us all. At the same time, the energy supply must be resilient. This is why it makes sense to secure additional production capacities for renewables in the current investment phase - incidentally, this is also what the USA and China are doing. Wind power is a key technology that must remain in Europe."

According to the German government, it is also currently working on a programme to secure the construction of converter platforms for offshore wind farms, which will be presented shortly. The European Investment Bank is also working on launching a guarantee programme for the wind industry.