Alfonso Faubel, formerly of Alstom, GE and Sentient Science, has just joined Siemens Gamesa Renewable Energy (SGRE) as the new chief executive of its onshore wind unit. According to SGRE, he will be focusing on addressing the challenging market environment and the digitalisation of the business unit, “bringing world-class expertise on digital technologies applied to wind power for cost reduction, improved reliability and increased profitability”.

What challenges does SGRE’s onshore business face given that your CEO Markus Tacke has said offshore is the priority for growth?

If we focus on prospects for onshore wind, I think we can all agree that they are solid. In fact, from an average of 63GW that will be installed annually in the next five years, approximately 87% will be onshore, according to the Global Wind Energy Council.

The overall challenge for onshore OEMs is to develop a competitive business model in the new context of lower selling prices, strong competition globally, and external pressure as well on the cost side (eg, trade tariffs). The only way to get there is through an innovative and competitive product portfolio, lean manufacturing footprint and excellent project execution.

In this context, going forward we will also need a strong commercial and pricing discipline, prioritising projects with market competitive margins while working together with customers suppliers and partners on jointly reducing the levelised cost of energy (LCoE) instead of just reducing price.

What will the onshore wind market look like for SGRE in Asia over the next five years? And how will China fit in with your ambitions, not least given the signal sent when the government shut out Western OEMs from the 6GW Ulanqab project?

Despite the fact that we were not selected for this specific project, SGRE’s ambition to grow in China remains unchanged. The Chinese market is currently dominated by local players, but we are definitely targeting to increase our market share in the country. Additionally, we would also like to foster development of projects jointly with Chinese companies in other markets in the region.

Apart from China, we are well positioned in India where we are a leading player and have developed a strong industrial footprint, with one state-of-the art nacelle assembly plant and two blade manufacturing facilities. As activity in the market picks up and some players are suffering from the adaptation to the new business environment, we will benefit from our leading position.

How do you see the European/MENA market evolving as your core Europe markets mature?

It is great news to see more and more countries including wind power as a key element of their energy systems, and the Middle East and North Africa are no exception.

Siemens Gamesa is very well positioned to address both markets. Our blade factory in Tangier, Morocco, for example, is clearly a competitive advantage to grow in these countries. Recent orders signed in Egypt, South Africa and Morocco show our potential in the region.

However, I would like to emphasise that European mature markets where we hold a very strong position, such as France, Spain, Germany or the Nordics, will continue to be in the top ten onshore world markets in the coming years, if governments continue to support wind power and offer good visibility. To these countries we can add others such as Turkey, Russia or Poland, which offer very good prospects and where we have a solid pipeline.

Earlier this year you secureda key order in the US from EDF for 232MW of your 4.5MW SG 4.5-145 turbines. How does this strengthen SGRE's foothold in the 3.5MW-plus turbine market segment there, and in the longer term post-PTC market landscape?

4.X platforms from all turbine makers are enjoying great penetration in the US market. That is SGRE’s case as well with our 145-metre-rotor platform, through which we have signed close to 1GW [of contracts] in the country in recent months.

This new-generation turbine offers great LCoE to customers, based on proven technology, and shows our commitment to continued innovation. Additionally, in recent months we have upgraded it from 4.5MW to 5MW, further enhancing our customers’ business case at a wide range of sites.

Regarding the post-PTC market landscape, it is too early to draw conclusions. We expect demand to be reduced compared to the current 2019 level, but the US will remain, for sure, as a very strong market going forward.

Relentless margin-tightening in an ever more competitive, auction-driven energy market has led you – and GE, Vestas, Nordex and Enercon – to launch innovative 5MW-plus machines. Will these achieve the desired aim of significantly reducing wind’s levelised cost of energy, not only in more mature markets but also in newer onshore areas?

Without a doubt. Our SG 5.8-155 and SG 5.8-170 turbines mean greater annual energy production per wind turbine and optimised capex [capital expenditure] and opex [operating expenditure], which equal a lower cost of energy for our customers.

Siemens Gamesa 5.X aims to be the leading product in each and every market across the world by 2021. The platform is the result of a thorough process to gather the requirements of our customers in all regions.