Looking back on 2020 – Part 2: Losses mount as Covid adds to sector’s woes

The second part of our review of the year looks at how the industry's major players fared as lockdowns caused some delays in installations and quite a few CEOs were waved off

The pandemic resulted in (temporary) factory closures and job cuts (pic: Vestas)
The pandemic resulted in (temporary) factory closures and job cuts (pic: Vestas)

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Manufacturers and developers alike battled uncertainty amid the coronavirus pandemic, with several wind power companies lowering and withdrawing guidance for the financial year.

They also reported heavy losses in quarterly updates throughout the year, with turbine makers suffering from supply-chain disruption and delays to project execution, while developers had to contend with reduced electricity demand and lower power prices.

Increased competition and squeezed margins had hit manufacturers even before lockdown measures tightened around the world, but in the second quarter of the year, losses mounted.

There was some respite by the end of the third quarter due to efforts to mitigate the impacts of the pandemic — often through job cuts and tighter capital spending — but the bad news continued.
For companies that had already been struggling before the pandemic, the urgency to develop restructuring and mitigation plans increased.

The carve-up of Senvion reached its final stages, with Siemens Gamesa’s deal for its European assets closing, and a Dubai-based investor agreeing to buy the German manufacturer’s Indian arm.

Compatriot Enercon looked beyond its core businesses of turbine sales in Germany by targeting international markets and partnering with energy company EWE on project development. It secured long-term financing and announced plans to restructure its production footprint in its home market — a process to be overseen by new CEO Momme Janssen.

Outside Europe, Suzlon parted company with its CEO amid heavy financial losses. Earlier in the year, the Indian OEM’s lenders had approved a restructuring deal dividing the company’s $1 billion-plus pile of debt into sustainable and unsustainable portions.

However, the pandemic did not prevent a series of investments and takeovers of companies in better financial health.

Siemens Gamesa unveiled plans to prioritise profitability over volume, with new CEO Andreas Nauen seeking a huge margin increase in the next three years.

Vestas agreed a deal to buy out offshore wind joint venture partner MHI and launched a new fund to invest in clean energy start-ups.

Meanwhile, GE Renewable Energy aimed to bolster its foothold in its home market by trying to block Siemens Gamesa’s turbines from the US — or at least bring its rival to the negotiating table for patent licensing. Siemens Gamesa then retaliated with an intellectual property lawsuit of its own against GE’s Haliade-X offshore turbine.

New faces — All change at the top amid exodus of high-profile leaders

There was a flurry of activity at the top of leading wind companies in 2020. A handful of resignations had already been announced by the end of the summer, and more were to follow.

At developer Ørsted, CEO Henrik Poulsen saw the year out following his resignation in June, after eight years in the role. Grundfos' CEO Mads Nipper (left) replaces him from 1 January 2021.

Personal reasons were cited for the departure of Vattenfall's CEO of six years, Magnus Hall, whose replacement Anna Borg (right) took office on 1 November. With a banking background, she had been Vattenfall's finance chief since 2017.

The CEO of Norwegian utility Equinor, Eldar Sætre — who oversaw the company's transformation from Statoil — was replaced by Anders Opedal, formerly in charge of technology at the same company. Sætre will retire in March 2021, after completing the handover to his successor.

Another CFO, Mary Quaney, moved into the top spot, when she became Mainstream Renewable Power's CEO in August following the resignation of Andy Kinsella after three years in post.

There was a more dramatic changing of the guard at Siemens Gamesa (SGRE), where CEO Marcus Tacke was replaced rather abruptly, in June, by offshore-wind veteran Andreas Nauen (right). No explanation for Tacke's departure was ever offered.

During his three-year tenure, Tacke oversaw the merger of Siemens with Spain's Gamesa, a process that involved job cuts, factory closures and streamlining the combined turbine portfolio.

On the back of a difficult year for SGRE, which suffered supply-chain disruption, project delays and market slowdowns, Neuen will have to focus on the post-pandemic recovery while seeking to resolve his company's patent dispute with GE.

At India's Suzlon, CEO JP Chalasani stood down in July, shortly after the firm recorded a full-year net loss of INR 26.9 billion ($361 million), which it said was caused by its debt restructuring process and lack of working capital. Salazani was replaced in October by Ashwani Kumar (left), previously head of energy at infrastructure development firms IL&FS.

The final big-ticket departure of the year was Enercon's Hans-Dieter Kettwig, who retired. Board member Momme Janssen (right) took over as CEO from 1 December to continue the German company's transformation.

Looking back on 2020 – Part 1: How the wind industry defied global pandemic

Looking back on 2020 – Part 3: Turbine ratings and rotor sizes continue to go up

Looking back on 2020 – Part 4: As people stay home, oil and gas majors go green

Looking back on 2020 – Part 5: Politicians pledge green post-Covid recovery

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