In November, Siemens Gamesa presented its new offshore wind turbine. While the move was met with 1.7 GW in orders from Vattenfall and Ørsted, which as recently as Wednesday added 1.3 GW with the Hornsea 2 order, the new turbine did not make a splash.
Likely a result of the fact that the dismissal of up to 6,000 employees had been announced and that most focus seemed directed towards issues in the price-squeezed onshore wind market. However, the lack of excitement could also be because the new turbine, with its 8 MW capacity, is not considered revolutionary.
The figure is just one MW more than Siemens Gamesa's previous offshore turbine and the same capacity as the one taken over from Adwen in connection with last year's merger and subsequently announced as in liquidation. It is also less than MHI Vestas' 9.5 MW turbine, and in contrast to announcements from 2014 and 2015 that the manufacturer expected to have a 10-20 MW turbine ready in 2020.
It may not have happened yet, but it still remains the plan, says Markus Tacke, CEO, after giving a press conference in connection with Siemens Gamesa's Capital Markets Day.
"Will there be a next generation? Yes, there will be a next generation," said the CEO.
"But it will be for the next generation of projects to emerge around 2024 and thereafter. So we are certainly working on the future of offshore wind to ensure that there will be powerhouses of electricity production, not just in Europe but also around the world, delivering power at very affordable prices."
In other words, utilities such as Ørsted and EnBW can breathe a sigh of relief. Last year, when the two companies won projects in the German tender with zero-subsidy bids, whereby the farms will run on pure electricity prices, they were banking on a larger generation of offshore wind turbines. The first of these projects will be ready in 2024, while the other two will spin the year after.
Most recently, MHI Vestas' departing CEO Jens Tommerup questioned the economic rational of larger offshore wind turbines. The point was that it not only required a new turbine, but also that it involved a costly recalculation of the entire value chain in order to produce and transport the larger elements.
Nor is the challenge to Siemens Gamesa's offshore market leadership from its Danish/Japanese rival due to a new turbine generation. The V164, formed by the joint venture, has increased its capacity from the original 7 to the now 9.5 MW.
Similarly, Siemens Gamesa's previous offshore wind turbine increased from 6 to 7 MW before the launch of the new 8 MW turbine. It will also come to grow over the coming years, said Tacke.
"There is always a discussion of how big it could become. We have recently launched the 8 MW.167 machine for installation in 2020-2022, which is the commercial turbine with the largest rotor; the largest machine on the market."
"But if I say 8, the industry knows there is more in this machine. Via digital intelligence, we can boost it to give a higher yield. Even though we tend to call it 8 MW, customers will in reality benefit from an even stronger machine."
Specifically, Siemens Gamesa lists three elements in its strategy paper which will increase production:
Partly, a power boost, which without changing the components will increase the impact by 5 percent and generate 2 percent higher production. Partly, tailored designs of the turbines on the specific farm, which are expected to give 1 percent. Finally, the management of the load in real time will leave the turbines able to yield more, particularly in extreme situations, where it is expected that the rotor will be in a position to exceed a 17 percent larger area than otherwise.
The customers to benefit are expected to work on a broader range of markets. Currently, it mostly concerns the offshore wind market in the North Sea, but there is more activity planned in the Baltic and off the coast of France in the coming years. However, the current major topic of discussion are markets beyond Europe, especially in the United States and Taiwan. South Korea and Japan are also on the horizon.
Both eastward and westward, Siemens Gamesa expects to be able to copy its European hegemony status and become the largest player on the respective markets. This also applies to the Chinese market where Siemens already installed its first offshore wind turbines in 2011 and has since worked via licensing agreements with local players.
"Looking at the markets, we want to maintain our first place in Europe and conquer first place in the US. In China, we have licenses for more than 50 percent of the market share, so Siemens Gamesa technology also takes first place in China," said Tacke.
"We also need to take first place in Asia outside of China. This is the clear plan that we're working on."
English Edit: Lena Rutkowski & Gretchen Deverell Pedersen