Siemens Energy Stock: Don’t Underestimate the Title

Last Updated: 13. November 2023By

When hearing the name Siemens Energy, what is the first thing that comes to mind? Most investors likely have the issues surrounding the wind power subsidiary Siemens Gamesa at the forefront of their minds. The struggling wind turbine maker has been dragging down the balance sheet of Energy for years and recently, the energy technology company had to accept a billion-dollar loss. The quarterly presentation due this Wednesday is also expected to be a deep shade of red. Accordingly, the share price of Siemens Energy has developed in the last few months (as of 10.11.2023, 09:00 a.m.):


The slump in June 2023 is particularly evident. This was when Energy had to admit that the technical problems of the Gamesa wind turbines were much more serious than thought. As a result, the company forecast significantly higher costs and had to dampen its forecasts again. At the end of October, it went almost vertically downwards again when it became known that Siemens Energy was talking to the federal government about guarantees for financing growth investments.

Green hydrogen: Energy strengthens energy transition But today, this should not be primarily about the problems at Gamesa, but rather about the strong potential of Siemens Energy beyond the struggling wind subsidiary. Because in fact, the company is one of the most important German pioneers of the energy transition. In addition to technologies for connecting wind farms to the power grid, this includes green hydrogen.

Energy offers gas turbines that can be operated in power plants with 100% of this climate-friendly hydrogen variant in the future. Recently, a consortium has put such an industrial gas turbine from Energy into operation in France as part of a pilot project and completely powered it with hydrogen.

However, for Siemens Energy, green hydrogen is not just a game, but a promising business. The demand for this CO2-free energy carrier is expected to increase massively in the coming years, in view of the climate protection targets – also in Germany. Now Energy has laid the foundation for this business in Berlin, in the presence of Federal Chancellor Olaf Scholz (SPD), Economics Minister Robert Habeck (Green) and Berlin’s Governing Mayor Kai Wegner (CDU).

The company has jointly inaugurated a gigawatt electrolyzer factory in Berlin with its French partner, the gas company Air Liquide. This marks the starting signal for the mass production of hydrogen technology. So far, Energy has only produced electrolyzers individually, such as for the above-mentioned project in France.

Capacity: Tripling planned for 2025 The factory in Berlin is to reach a capacity of one gigawatt in the next twelve months. A tripling to three gigawatts is planned for 2025. This would enable the production of around 300,000 tonnes of hydrogen per year. According to Energy, this could save around 15% of Berlin’s CO2 emissions if the hydrogen were to be used as a substitute for fossil fuels.

Specifically, Energy and Air Liquide will produce membranes for the cells of the electrolyzers in the Berlin factory. These are based on the common proton exchange membrane technology (PEM) and are layered into meter-high stacks. 24 of these “stack cabinets” are then assembled at other locations such as Mühlheim into an electrolysis plant each. In its first production year, the Berlin factory will deliver around 1,300 stacks.

The clever thing: Siemens Energy did not build an entirely new factory for stack production, but converted an existing plant. This saved costs. Together, Energy and Air Liquide have only invested 30 million euros in the Berlin location. In addition, the Federal Ministry for Research and Development (BMBF) has granted financial support as part of the “H2Giga” subsidy program. This should promote the mass production of electrolyzers.

My conclusion for you regarding the Siemens Energy share: Without a doubt, the problems at the wind turbine subsidiary Gamesa are serious and rightly at the center of attention on the stock exchange. This will also be the case this Wednesday (15 November) when Energy presents its new figures.

As an investor, however, you should not underestimate the Energy share. First of all, the management is working hard to get the Gamesa crisis under control. Here, a clear perspective is now needed. Perhaps the company can make it credible on Wednesday.

Second, Siemens Energy is a strong player beyond Gamesa with tremendous future potential. The corporate divisions that are not directly related to Gamesa have been able to generate solid growth figures in the last months and years. Above all, the energy transition is a unique opportunity for Energy and its share price in my opinion. The company has the necessary know-how to help Germany significantly in decarbonization, among other things.

The new electrolyzer production again reveals this potential. But keep in mind that these energy transition opportunities are to be understood in particular in the medium to long term. The (now much more affordable) Energy share should therefore be approached with sufficient perseverance.