Siemens Drops Gears in Offshore Wind Battle With Vestas

Siemens AG (SIE) is betting it can sell an unproven wind turbine that uses rare-earth metals from China to cement its lead over Vestas Wind Systems A/S in an offshore power market that’s forecast to be worth $50 billion by 2020.

Germany’s largest engineering company is developing a machine with fewer moving parts to be used at sea, saying the design offers simpler maintenance and improved reliability. Denmark’s Vestas, the world’s biggest supplier for land-based wind farms, is sticking with its existing technology.

With winter gales exceeding 90 miles (145 kilometers) an hour and waves topping 15 feet at prime sites in the North Sea, the thousands of turbines planned must be rugged enough to avoid a maintenance disaster that could sour the offshore fortunes of either supplier. While Siemens’s “direct-drive” design eliminates gears that are a major cause of outages in current turbines, the novelty may be its main drawback, analysts said.