At the end of Q3, 2015, (April 1 to June 30) German multinational Siemens has a decent showing to post owing to good performance by its industrial businesses, including wind power and renewables.
The company has retained its fiscal year forecast of 10–12 percent growth as the quarter has brought in much better results than it had expected.
Siemens registered 4 percent year-on-year increase in orders in Q3, 2015, (19.9 billion euros); it posted 8 percent rise in revenues (18.8 billion euros); and industrial business profit level has been reported to stand at 1.8 billion euros.
“Overall our businesses delivered solid underlying profitability despite a softening market environment. We expect to maintain our momentum with a strong closing quarter for fiscal 2015.” Joe Kaeser, the president and chief executive officer of Siemens, has stated in the quarterly report.
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For wind power and renewables business of Siemens, its key markets have been slowing down.
The company reported a decline in orders for onshore wind projects in the quarter. But it has seen significant expansion in offshore project segment.
Although revenue from wind power and renewables decreased from 1.426 million euros in Q3, 2014, to 1.416 million euros in Q3, 2015, profits have increased by 26 percent from 41 million euros to 51 million euros year-on-year.
It is also notable that the quantum of orders has decreased from 2,007 million euros in Q3, 2014, to 693 million euros in Q3, 2015. The company has stated that large scale orders have been low compared with Q3, 2014.
A look at key wind power and renewables related reports that the company produced in the quarter is indicative of the paucity of large-scale orders.
In April when Siemens inaugurated the 288-megawatt DanTysk offshore wind power project in German North Sea, it crossed total installed capacity of 1 gigawatt feeding Germany’s power grid.
The DanTysk project has 80 Siemens wind turbines of 3.6 megawatt capacity.
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At the time the company reported it had 700 additional offshore wind turbines to be erected in North Sea and Baltic Sea and would add 2.8 gigawatts to its installed capacity.
In May, Siemens announced a deal with Pattern Energy to supply 65 wind turbines and 67 transformers for the Amazon Wind Farm (Fowler Ridge).
The 150-megawatt, onshore wind project in Indiana, US, was to power a data center of Amazon Web Services and the project was expected to be commissioned in first quarter of next year.
In June Siemens signed energy contracts to the tune of 8 billion euros with Egypt.
It included the development of high-efficiency natural gas-fired power plants and wind power installations that were to add 16.4 gigawatts to Egypt’s national grid.
Also in June, the company won an order for 91 turbines from Dong Energy for the construction of a 580-megawatt offshore wind project in the UK. It was among the biggest orders in the quarter.
Although the prospects for onshore wind energy projects in the UK appear to have weakened in the wake of withdrawal of subsidies, offshore projects remain potential avenues for development.
Countries such as the US and Japan could be significant contributors to offshore development.
The Asia-Pacific region is also emerging as a big market for wind power development largely for onshore projects as developing countries, too, pitch in to expand share of renewable energy in their energy mix.
Ajith Kumar S
This article is part of a series in which Greentechlead.com will be focusing on clean energy companies.