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Siemens Gamesa's CEO-designate eyes onshore wind development to fix quality problems

FILE PHOTO: Illustration shows Siemens Gamesa logo

MUELHEIM AN DER RUHR, Germany (Reuters) - The designated boss of Siemens Energy's troubled wind turbine division will review whether onshore product cycles should be longer, suggesting that current development time may be too short.

Short product cycles and the limited testing and rushed development that they entail have been cited as key reasons for why Siemens Gamesa's newest onshore turbines have been hit by quality issues, causing the group's biggest crisis to date last year.

"Typically, when you talk about offshore wind platforms, these are generally speaking five- to seven-year journeys to develop," said Vinod Philip, who replaces Jochen Eickholt as Siemens Gamesa's CEO from Aug. 1.

"It is a little bit less black and white for onshore. The cycle the industry created with two years (development time), without the appropriate supply chain development, is very ambitious."

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Siemens Energy is the world's largest maker of offshore wind turbines. Its quality problems producing onshore turbines have exposed major flaws in a young industry experiencing strong demand as countries seek emissions-free power sources.

Philip said he was reviewing development times with Eickholt, who had taken over as Siemens Gamesa CEO in early 2022 to help fix the business that has lost money for years.

Philip said he was confident that the division could break even in 2026, a target set by the parent group.

"I think it doesn't help if you start a race by believing you will lose it," he said.

Philip, who sits on Siemens Energy's management board, said the company was considering all options for its wind business in India, part of a push to focus on markets where it can grow profitably.

"We have a good market position there and important service activities but profitability is low."

(Reporting by Christoph Steitz; editing by Rod Nickel)