Siemens Energy, the German energy engineering group, is focusing on its electricity grid business as it navigates challenges in its wind turbine division. The company's Grid Technologies division, already the largest revenue generator, plans to expand its workforce by two-thirds by 2030 and invest €1.2 billion in new factories and increased manufacturing capacity in the US, Europe, and Asia.
This strategic move comes as global demand for electricity surges, driven by the growing adoption of renewable energy sources and the need to upgrade aging infrastructure. Siemens Energy's Grid Technologies division, the world's second-largest manufacturer of electricity transmission equipment, is well-positioned to capitalise on this trend.
The company has seen its orders double from €7 billion to €15 billion between 2021 and 2023, with an additional €12 billion in orders in the first half of this year. This strong demand has led to a €30 billion order backlog, which Siemens Energy aims to fulfil by 2030 through its expanded capacity.
While the renewable energy sector faces some uncertainties, particularly in wind power, the need for robust grid infrastructure to connect new energy projects remains critical. Siemens Energy acknowledges the challenges in securing funding for such projects but remains confident in its growth projections for the Grid Technologies division.
The company's ambitious plans for its grid business come as it grapples with problems in its wind turbine division, Siemens Gamesa. Quality issues and a private financing crunch have led to significant losses and a government-led rescue plan for the division.
Despite these challenges, Siemens Energy is forging ahead with its strategy to strengthen its position in the electricity grid market. The company's significant investment in the Grid Technologies division reflects its confidence in the long-term growth potential of this sector and its commitment to playing a key role in the global energy transition.
