Siemens Energy plans 10,000 hires as it earmarks €1.2bn to boost electricity grid unit

Siemens Energy plans to hire more than 10,000 new employees to put its electricity grid business at the centre of an ambitious six-year growth plan, as it seeks to move beyond the problems hobbling its crisis-hit wind turbine division. 

The group’s Grid Technologies division — already the German energy engineering group’s largest revenue driver — will expand its workforce by two-thirds by 2030, with €1.2bn in capital expenditure earmarked for new factories and increased manufacturing capacity in the US, Europe and Asia, the unit’s boss, Tim Holt, told the Financial Times. 

“We see this huge boom coming,” Holt said in an interview, citing surging demand for electricity, a wave of renewable projects under construction requiring better grid connections, and widespread ageing infrastructure only just handling existing power loads.

Siemens Energy’s grid engineering division is the world’s second-biggest manufacturer of electricity transmission equipment, narrowly behind Japan’s Hitachi Energy and ahead of the US’s GE Vernova by revenue.

The company hopes to realise most of its expansion plans within the next two years. About 40 per cent of the jobs will be added in Europe, 20 per cent in the US, 20 per cent in India and the rest elsewhere in Asia and Latin America.

“It has already started to take off,” Holt said, noting that from 2021 to 2023 the unit doubled its orders from €7bn to €15bn, with the figure totalling €12bn in the first half of this year. 

In the US, where the company plans to expand its factory in Charlotte, North Carolina, Holt said he was aware of research that showed power companies “need to invest in the next 15 years what they invested in the last 150 years” in the grid there. 

Elsewhere, the size of new committed energy projects in Europe meant a huge amount of infrastructure investment was going to be needed to connect them to the grid, he said. 

Siemens Energy was spun out of its namesake, Siemens, in 2020. 

For the past 18 months, the company has been rocked by problems at its wind turbine division, Gamesa, after quality issues and a private financing crunch led to a €4.6bn annual loss and a government-led rescue plan. 

Gamesa, which was responsible for a third of group revenues before its crisis, appointed a new chief executive in May and said it hoped to resume sales of its core turbines which suffered from engineering defects, in the coming months. 

The outlook for further growth in the renewables sector — and wind in particular — is uncertain, however.

Last week, the chief executive of Europe’s largest renewables provider, Statkraft, said the company was scaling back plans for new projects.

Holt admitted that efforts to expand and refurbish electricity grids could face constraints from capital markets’ appetite to fund more energy transition-related investments.

“The market is getting tighter and tighter and we are going to have to look at alternative ways to fund it,” he said.

Nevertheless, the executive is confident Siemens Energy’s Grid Technologies business would overcome such challenges.

The division recorded revenues of €7.2bn in 2023 and has guided shareholders towards a 30 per cent increase in revenues in the division this year. Holt said by 2030 the division hoped to be “somewhere between €18-20bn in revenue”. 

A big part of getting there will come from closing an order backlog that is already €30bn in size, he said. By 2030 he said he hoped “full order to revenue conversion will take place” based on the division’s new capital expenditure plans.

“Everybody is a bit scared about these projections and making these large Capex commitments, and in energy you always see booms and busts. But we are actually very confident in the projections,” Holt said.