Siemens Energy will prioritise grid expansion projects over wind power, allocating around $1.6 billion (1.5 billion euros) in investments over the next six years, the Financial Times reported.
According to the Financial Times, a six-year expansion plan calls for a significant increase in the company’s workforce, with plans to hire 10,000 new employees.
Upgrading and expanding the power grid is a top priority for transition-focused governments, given the fact that electrification is at the heart of the transition. But expanding the power grid is a massive undertaking in any country, requiring many workers and a lot of capital.
In the United States, the upgrades and expansions needed to prepare the electricity grid for the transition are estimated to cost more than $2.5 trillion by 2035. In Europe, annual investments in grid upgrades are calculated to be around $73 billion, or €67 billion, between 2025 and 2040.
Siemens Energy wants to get a piece of the U.S. and European power grid upgrade pie. “We see this huge boom coming,” Tim Holt, head of Siemens Energy’s power grid business, said in an interview with the Financial Times, citing projections of growing electricity consumption, the addition of new wind and solar capacity that needs to be connected to a grid that can accommodate it, and the need to replace aging grid infrastructure.
The plan is a shift in priorities for Siemens Energy after its wind business blew a hole in the company’s bottom line last year. The company was plagued by quality issues, rising costs and ramp-up challenges in its wind business and posted a net loss of $5 billion for fiscal 2023. At the end of the year, Siemens Energy decided to reassess its wind business, and earlier this year, the company said it expected its wind division to post losses again, but at a more manageable $2.16 billion.
By Irina Slav of Oilprice.com
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