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In this article, I will be shedding light on the complications within the turbine division of tech giant Siemens Energy and exploring the subsequent financial ramifications faced by wind turbine operators.
If you have purchased 4.X or 5.X wind turbine platforms, you may be entitled to damages claims. Contact Felix for further information.
Understanding the challenges facing Siemens Gamesa’s onshore wind turbine platforms
Throughout 2023, it became evident that many of the Siemens Gamesa wind turbine platforms 4.X and 5.X were plagued by significant quality defects. These issues primarily revolve around wrinkles in the rotor blades which compromise their efficiency and longevity. Additionally, particles have been discovered in the main bearings of the turbines, which is also cause for serious concern. ¹² Our legal team is already familiar with these defects from its client work.
Siemens Gamesa itself acknowledges defects in up to 30% of the 4.X and 5.X platforms³, which raises serious doubts about the overall reliability and safety of wind turbines based on these platforms.
Financial consequences and delays for wind turbine operators
Unsurprisingly, these major quality defects can impose substantial financial burdens on wind turbine operators utilising the 4.X and 5.X platforms.
The quality defects can lead to problems in the operation of wind turbines that have already been installed. In view of the complexity of wind turbine technology and the associated repair time, such defects can lead to considerable operational interruptions while they are being rectified, which may cause substantial financial burdens for wind turbine operators.
The defects can also result in significant delivery delays, potentially causing significant financial consequences for wind turbine operators. These delivery delays, in turn, can lead to problems with licenses and feed-in tariffs or other related incentives. In addition, commitment fees may be incurred for bank loans if construction (and thereby operation) of the wind turbine cannot begin due to a lack of delivery. Longer delivery delays can lead to the deadlines for providing the loans expiring. In this case, the loans may have to be restructured or may even be cancelled altogether.
Could you be entitled to unrestricted damages claims?
Based on the current work of our lawyers with Siemens Gamesa customers, it is likely that wind turbine operators may be entitled to higher claims for damages than according to Siemens Gamesa’s contractual agreements. This applies particularly to loss of profit caused by defects in already installed wind turbines and as well as by delay in delivery. This depends on the governing law of the specific case.
Contractual agreements with Siemens Gamesa contain limitations and exclusions of liability, as well as liquidated damages for delay. However, doubts arise about the validity of these provisions of Siemens Gamesa’s General Terms and Conditions, with the national statutory law likely to take precedence. If for example in Germany the statutory law provisions, i.e. the provisions of the German Civil Code (BGB), apply, Siemens Gamesa could be liable to a much greater extent than stipulated in the contractual provisions. There are similar results in many other jurisdictions.
Enforcement of claims
According to the contractual provisions known to gunnercooke, all disputes shall be settled by ICC or DIS arbitration, excluding recourse to the ordinary courts of law. A dispute settlement procedure must be conducted before arbitration proceedings are initiated. Claimants must also note that, according to the contractual agreements known to gunnercooke, negotiations do not suspend the limitation period.
Our team is currently engaging with a litigation funder who could enable wind turbine operators to enforce their claims without any cost risk, in exchange for a corresponding share of potential profits.
Strength in numbers
The more wind turbine operators jointly assert claims, the greater their negotiating power, enabling a considerable increase in the chance of an amicable settlement of the dispute.
At the same time, this approach results in substantial cost savings for all claimants, as legal advisors only need to familiarise themselves once with the relatively constant circumstances.
If your business has been impacted by issues with the Siemens Gamesa 4.X and 5.X wind turbines, you could be eligible for compensation. Secure peace of mind with the assistance of our legal experts, who are dedicated to finding the optimal solution for you. Contact our partner Felix Thiede for more information.
Felix is a partner in gunnercooke GmbH, whose registered office is Kurfuerstendamm 15, 10719, AG Charlottenburg, HRB 224488 B. All lawyers of gunnercooke GmbH are admitted in Germany to practise as Rechtsanwalt or Rechtsanwaeltin and are members of and regulated by the relevant local Bar (Rechtsanwaltskammer).