Developers of renewable energy projects have limited exposure to the wind turbines that are at the heart of far-reaching quality issues at Siemens Energy's Siemens Gamesa division, brokerage Citi said. Siemens Energy last week warned of quality problems at up to 30% of its onshore fleet, sending its shares down more than a third on fears of the associated costs, which UBS has put at more than 5 billion euros ($5.5 billion) in a worst case scenario.
Citi said that Siemens Gamesa's 4.X and 5.X, its two most recent onshore wind turbine platforms, seemed to be at the centre of concerns, chiming with similar comments from Portugal's EDP Renovaveis a day earlier. "None of the developers we spoke to are currently experiencing issues with their onshore (Siemens Gamesa) platforms or have been communicated delays in offshore deliveries," Citi wrote in a note on Thursday.
Citi's comments, which draw on discussions with developers, come after several developers, including RWE, Iberdrola and Copenhagen Infrastructure Partners, this week said that they had so far not observed any problems with their fleet of Siemens Gamesa turbines. As a result of the problems, which are linked among others to bearings and blades, Siemens Energy withdrew its 2023 profit guidance.
"It appears developer exposure to (Siemens Energy's) profit warning is limited, at least for now," Citi said, adding that while Britain's SSE had no exposure to the X series, it put the company's overall onshore exposure to Siemens Gamesa at 55-60%.
The brokerage added that investors, during meetings this week, had pointed to a raft of profit warnings by wind turbine makers, thin returns for offshore as well as higher costs as a challenge to turn a profit in the sector. "Until confidence returns, renewables share prices may just be treading water."
($1 = 0.9153 euros)
(Reuters -Reporting by Christoph Steitz; Editing by Conor Humphries)