Yikes

Yikes. No one likes surprises, no one. Especially when it comes to the financial guidance on next year’s earnings. It is, then, well, no surprise to see the shares of Siemens Energy getting properly smoked. Walloped. The problem is at the group’s wind turbine business, and the problems, well, there are many. The profit guidance, beloved of sell-side analysts, got canned. Management, through thin lips, talked about how “bitter” it was that they will need to spend more than €1bn fixing a whole bucket of stuff. The bucket included. Many of the issues were thought to be getting better, but they are not. Indeed, the company has been plagued by issues from blades plunging to the ground, refusing to move, or taking out unsuspecting wildlife. There have been strikes, plant closures and supply chain horrors. Lawsuits swirl. Whilst wind power is hailed as a crucial component of the great energy transition a read-through of the problems at Siemens Gamesa is no confidence builder that net-zero is within reach. Which is why, perhaps, in the same week that it’s all gone wrong for shareholders, the Swedish Government took the eye-brow twitching move in announcing that it was scrapping its goal of 100% renewable energy. Out. No more. Wind and solar are basically too unreliable to base a country’s supply on. And so, they’re not. The savvy politicians are on it, and aware that the slack-jawed electorate want warm houses to lounge and chomp their way through Netflix’s increasingly uninspiring catalogue. What they don’t want, is black outs. It’s poignant that the renewable agenda was pioneered in the Nordic countries, but there now seems to be a general switching off from the idea. The answer, say the Swedes, is obvious: “Only a nuclear pathway is viable to remain industrialised and competitive” said an impassive Finance Minister Elisabeth Svantesson. Cameco, the Giant Haystacks of uranium miners, is up nearly 50% over the past 12 months, and pushing fresh record highs. Spot uranium is closing in on $60. Long-term contracts are flying. There is simply not enough around. The nuclear renaissance is here.