Firm Drops Plans to Manufacture Offshore Wind Turbines in Virginia
PORTSMOUTH, Va. — Siemens Gamesa, the German-Spanish wind engineering company, will not be building a planned $200 million factory to manufacture offshore wind turbine blades in Virginia after all.
The massive facility, which had been projected to create more than 300 jobs, was a key component of the state’s aspirations to become a critical hub for offshore wind projects up and down the Atlantic coast.
But the firm said the move was part of a restructuring of its wind turbine business after it experienced “unexpected” and “serious” financial losses and agreed to a rescue plan led by the German government.
“In a year of unprecedented challenges, Siemens Energy showed that turnarounds are achievable, with the businesses, excluding wind, meeting or exceeding their full-year targets,” said Chief Executive Christian Bruch during a press conference in Munich, Germany, on Wednesday.
During that press conference, Bruch announced Siemens Energy, the clean energy portion of the business group, had a full-year net loss of $4.9 billion.
Siemens has said it doesn’t expect the company’s wind business — buffeted by inflation, raised interest rates and supply chain issues — to return to profitability until 2026.
Overall, the company expects its other divisions to return to profitability next year.
“We are seeing progress in dealing with the issues at Siemens Gamesa, and I am encouraged that the data from the installed onshore turbines confirm our previous findings,” Bruch said. “Our strong balance sheet remains a top priority, and Siemens Energy’s vital role in the energy transition will continue to drive our growth and success in the years ahead.”
As for the now abandoned plan to build a manufacturing plant in Virginia, Siemens Gamesa has officially offered very little in the way of explanation for its decision, saying only that it could not meet “development milestones.”
But the company is far from alone in confronting difficulties in the U.S. offshore wind market.
Danish energy developer Orsted recently abandoned plans for two large offshore wind power projects off the coast of New Jersey, citing the same issues that doomed the Virginia manufacturing facility.
And then there’s the Park City Wind project off the coast of Massachusetts, which Avangrid, a subsidiary of Spanish utility company Iberdrola, scrapped after several Connecticut utilities opted out of a long-term power purchase agreement.
Despite Siemens Gamesa’s decision, construction of Dominion Energy’s 176-turbine wind farm off the coast of Virginia Beach is expected to continue at full tilt.
That’s because its turbines are being manufactured in Siemens Gamesa facilities in Europe.
It was then-Virginia Gov. Ralph Northam who in 2021 announced that Siemens Gamesa would join Dominion Energy and Orsted in developing an offshore wind manufacturing hub at the Port of Virginia in Portsmouth, Virginia.
Northam said at the time Siemens Gamesa’s blade finishing facility would represent a $200 million investment and would create 300 new jobs.
Northam’s successor, Gov. Glenn Youngkin, has yet to comment on Siemens Gamesa’s decision.