In our ESG and Climate report tomorrow we are focusing on the wind industry and specifically the problems that Siemens Gamesa is facing with execution, costs, and logistics. The estimates for China and the rest of the world in the chart below assume a significant step-up in the rate of installation, and in 2022 we are seeing an industry that is struggling with that. Siemens Gamesa is having problems with its new platform, which had been intended to deliver projects more cheaply from an installed cost basis and an operating costs basis and is perhaps an illustration of what can happen when you are trying to move too quickly – partly because your customers are demanding it. Operational problems at Siemens Gamesa have been compounded by logistic challenges and raw material price and availability, such that current expectations are for the company to break even at an EBITDA level in 2022. This is another great example of the policy and investor disconnects that we see in several aspects of energy transition – we are encouraging investment in front line capacity, but not in the materials and feedstocks needed to feed the front line – metals, natural gas, crops. See our recent body of ESG and Climate work for more on this. These subjects are at the heart of many of the private engagements that we have with several clients in this space.
