Siemens Energy is set to prioritize its grid expansion business over wind power, committing approximately $1.6 billion (€1.5 billion) in investments over the next six years, according to a report by the Financial Times.
The ambitious six-year plan involves a significant workforce increase, with the company planning to hire 10,000 new employees to support the expansion, as noted by the Financial Times.
Grid upgrades and expansion are critical for governments focusing on energy transition, as electrification is a key component. However, this endeavor is substantial, requiring extensive labor and financial resources in any country.
In the United States, the cost of making the grid transition-ready by 2035 is estimated at over $2.5 trillion. In Europe, annual investments in grid upgrades are projected to be around $73 billion (€67 billion) between 2025 and 2040.
Siemens Energy aims to capitalize on these opportunities in both the U.S. and European markets. “We see this huge boom coming,” Tim Holt, head of Siemens Energy’s grid business, told the Financial Times. He highlighted the anticipated increase in electricity consumption, the construction of new wind and solar capacity that needs grid connectivity, and the need to replace aging grid infrastructure.
This strategic shift comes after Siemens Energy’s wind power business negatively impacted the company’s financial performance last year. Quality issues, rising costs, and ramp-up challenges in the wind sector led to a net loss of $5 billion for the 2023 fiscal year. Consequently, Siemens Energy decided to reassess its wind power business. Earlier this year, the company announced it expects another loss in the wind power unit, albeit a more manageable one, estimated at $2.16 billion.