Engie takes hit on malfunctioning Nordex turbines at onshore wind farm in US

Engie booked a €714m ($773m) impairment charge last year due to operational issues with Nordex-made wind turbines on an onshore US wind farm.

About $784m was described as losses on property, plant and equipment on renewable energy production assets, and most of this was in North America where it was “due to very specific operational difficulties linked to turbine performance on a wind power asset.”

In an earnings call with analysts, Engie CFO Pierre-François Riolacci described the operational problems that led to the losses.

“It is linked to one wind farm where we had technical issues with one OEM, Nordex ... we have availability of facilities which are running around 30%, even less sometime, so we clearly have an issue there,” he said.

“We have been conservative… No claims have been recorded, but clearly we will defend our rights. For us this is one domain, and we don’t have these turbines elsewhere, so it is a very local issue and company related”, he stressed.

In an e-mailed statement, Nordex declined to comment on what it described as a customers’ commercial information. However, the German wind turbine manufacturer said: “Engie has been an important and valued customer of Nordex for years. We installed several wind farms with them in the US and Europe, and we are currently working on other projects with them as well."

Engie said impairments were also related to a drop in energy prices in the US Southwest Power Pool (SPP) region and a bigger hit stemming from the accelerated decommissioning of coal assets in South America.

The company has been expanding aggressively into global clean energy, especially solar and wind, with a mixture of organic and inorganic growth.

Engie reported that 3.9GW of additional renewables capacity was installed in 2023, to reach a total of 41.4GW, with 6.3GW more under construction.

The current total of installed capacity includes 17.9GW of hydroelectric power, 14.3GW of onshore wind, 6.6GW of solar and 1.5GW of offshore wind.

"We have now become a substantial renewables player globally and across all the major technologies," CEO Catherine MacGregor told analysts. "Size matters. It makes a difference. It makes us more competitive and more influential."

She said the company had made strong headway in North America, but also added significant capacity in Europe and Latin America, and expanded its platform in South Africa.

"At the end of 2023 we had 60 projects ongoing, with 6.3GW of capacity under construction," MacGregor said.