This raises a number of questions. Is all going well? Offshore wind companies are increasingly becoming stand-alone joint ventures, cases in point being MHI Vestas Offshore Wind and the Gamesa-Areva joint venture. Could Siemens reverse this pattern to make its onshore wind division a non-core unit or joint venture?
Siemens' onshore division has certainly gone through some organisational changes recently. Until earlier this year, it was split into three divisions — Asia, North America and EMEA — but was combined into one under EMEA CEO Jan Kjaersgaard in March. Subsequently, he announced he was leaving the company to head up Danish foundations manufacturer Bladt Industries and Siemens brought in former Nordex CEO Thomas Richterich as a replacement.
Siemens itself remarked in its business year 2012/2013 annual report, released in November 2013, that the overall wind power industry "suffers from overcapacity and is widely regarded as being in an early stage of consolidation".
Not only that. Siemens' announcement of its Vision 2020 plans in May 2014 specifically cited offshore wind turbines, along with small gas turbines, as "growth fields which are profiting from a growing demand for secure and sustainable power supplies". Onshore wind did not get a mention.
This may have been because Siemens onshore wind business took a dramatic dive in 2013.
In 2013, roughly 37GW of wind capacity was installed around the world, according to BTM Navigant, of which Siemens share of megawatts supplied was 7.4% or 2,738MW.
Of this total, 1,082MW was grid-connected offshore by Siemens, according to EWEA statistics released in January 2014, meaning Siemens onshore installations amounted to around 1,656MW in 2013.
In onshore wind, Siemens, one of Germany's industrial flagships companies is only slightly larger than medium-sized Nordex, which clocked up 1,254MW (after 920MW in 2012).
For comparison, the BTM Navigant World Market Update 2012 report found 43.1GW had been supplied worldwide in 2012, with Siemens taking a 9.5% share, or 4,095MW. Of this, 860MW was grid-connected offshore, according to an EWEA offshore wind statistics document released in February 2013, meaning Siemens onshore wind installations in 2012 amounted to 3,235MW.
According to this data – which is not exact because offshore statistics refer to turbines connected to the grid, and not turbines installed – Siemens onshore performance in 2013 plummeted by around 1,579MW or a substantial 49%.
Siemens itself merely confirms that it installed more than 4GW in 2012 and around 3GW in 2013, onshore and offshore combined.
There are reasons to assume that onshore wind has improved in 2014 for Siemens. The company referred indirectly to onshore wind when it noted in its Q2 report for the fiscal year 2014 that profit development in the first three months of 2014 in the wind division was "held back by an unfavourable business mix that included an unusually low contribution from the higher margin offshore business compared to the same period a year earlier."
For the April-June quarter of 2014, (Q3 in Siemens fiscal year 2013/2014) Siemens remarked that revenue in the wind division was higher than in the equivalent period a year previously, in part because "the increase in the onshore business more than offset the decline in the offshore business".
While the latest onshore data is not yet available, Siemens had 633MW of new offshore wind grid-connected in the first six months of 2014, down from 866MW in the same period of 2013, according to EWEA's half-year 2014 offshore report released in July.
Changing focus
Siemens intends to grow its wind energy business by placing more focus on onshore wind energy, but by growing it "organically", not through joint venture or acquisition, stressed a company spokesman.
In the past, the US onshore market and offshore wind were much more in focus as bigger types of business and the shrinkage of the German offshore market is one of the reasons for the change in strategy, he said.
"The onshore market is more fragmented and we want to make better provisions for this — the aim is to pay much more attention to the needs of small onshore customers, including providing complete service packages, as evidenced by a recent order from a people's wind park in [the German state of] Schleswig-Holstein," he pointed out. Siemens is supplying 12 turbines with a total 36MW to the Süderlügum community wind farm, including a 20-year service and maintenance contract, it announced in July.
Siemens is also presenting a new turbine type optimised for low wind speeds at onshore locations at next week's wind energy event in Hamburg (23-26 September), he noted.
The success of the new onshore strategy will be down to Richterich, heading the Siemens onshore wind sector since 8 September. Certainly, after around ten years to early 2012 at onshore wind company Nordex, followed by an interim post as head of Vestas Central Europe in 2013, he appears to fit the profile.
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