Jorge Lobatón
Managing Director Mexico and Latin America
Siemens Gamesa Renewable Energy
View from the Top

When Giants Merge, the Wind Blows Stronger

Wed, 02/21/2018 - 13:43

Q: What does the creation of Siemens Gamesa Renewable Energy mean for Mexico’s energy industry?

A: The merger between Siemens Wind Power and Gamesa has resulted in an even more robust, solid company. Siemens Wind Power was the market leader in offshore operations, and had a strong onshore presence in Europe and the US. Gamesa was one of the leaders in onshore operations with a comprehensive footprint in Latin America, India and South Europe. The advantages of the merger were crystal clear. Now, Siemens Gamesa Renewable Energy can participate as a global player with an even stronger presence, reflected in the costs, technologies and commercial activities offered to our clients thanks to the integration of two excellent teams. In Mexico, Siemens Gamesa operates a large installed fleet, enabling us to offer better construction, development and O&M services and equipment through economies of scale, together with the administration and operation of those assets. 

Q: What different capabilities do Siemens and Gamesa bring to the table?

A: Gamesa was a project developer when the industry was just starting. It was not only working on its own business but helping the industry grow and become more competitive. In time, it recognized that projects were becoming increasingly demanding, meaning that it was working on activities outside its main added value area. The company decided to focus on supplying wind turbines and offering services related to its core business. Although we limited the range of our activities at that time, we can now offer extra support to our clients due to our past as a developer. This is an uncommon asset in the industry. Siemens, meanwhile, is an extremely strong ally in the technology area, offering many products for BoP. With its knowledge, we provide broad expertise in the electricity area that ensures that projects will be done right. The fact that Siemens AG is now the main shareholder in Siemens Gamesa provides access to financing solutions to support our activities and the new product platforms we want to bring to market narrowing, meaning that it is becoming harder to achieve expected profits. To boost market share, many players in the industry have followed the merger strategy, such as Nordex with Acciona and GE with Alstom. Siemens Gamesa is confident because of its track record and the capabilities the merger brings to the table, including the creation of a new business unit that offers maintenance services for our offshore and onshore operations.

Q: How does Siemens Gamesa promote competition in the Mexican wind industry?

A: We are focused on bringing down prices, always looking for the best options to slash costs. This was the strategy behind our investment in WINDAR, a tower and wind turbines manufacturer. Given the conditions in the country it was best to invest with them rather than install new facilities. It also incentivizes competition, which in the end is beneficial for the industry. This is an industry that is highly driven by logistics costs, and we do not yet see a clear advantage in localizing manufacturing facilities in Mexico. 

Q: What is Siemens Gamesa’s objective in Mexico?

A: Objective zero, meaning zero accidents. This is a priority for us globally. In Mexico, we want to be as competitive as possible and introduce as many of our new wind turbines to the market as possible. Mexico is pioneering new technology platforms Siemens Gamesa can offer. Our G132-3.465 MW was sold in Mexico before anywhere else in the world. We also expect the first installation of the recently introduced SG4.2-145 turbine to be in this country. This platform will also have the advantage of being the first turbine developed jointly by the former Gamesa and former Siemens teams under the Siemens Gamesa name. The turbine will be an example of excellence in the market because it was developed by two teams with different visions creating synergies for the benefit of the industry.