We hosted the quarterly strategy call with our President and CEO Håkan Agnevall on September 23. The CEO strategy calls aim to offer an opportunity to discuss Wärtsilä’s strategy and the progress of its implementation with the CEO. No material new information was disclosed during the call.
The recording of the call is available here.
Wärtsilä sees multiple growth drivers supporting long-term demand
During the call, Håkan highlighted that Wärtsilä continues to be supported by multiple long-term structural trends rather than any single market opportunity.
Following two consecutive record order intake quarters in Energy and a record-high order intake in Marine during the second quarter, customer activity has been strong across the core markets.
Multiple growth drivers support Energy market growth beyond data centres
Global electricity demand is expected to grow significantly in the coming decades, driven by electrification, increasing cooling needs and the rapid expansion of AI and digital infrastructure. At the same time, the energy transition continues to drive demand for flexible and reliable power generation needed to support growing shares of renewable energy. Together, these trends are creating opportunities across both traditional power generation and balancing power markets.
Interest from the data centre segment remains strong, with Wärtsilä continuing to see a healthy pipeline of opportunities. Demand is increasingly focused on reliable, efficient and scalable power solutions that can support mission-critical operations and rapid deployment schedules.
However, Håkan emphasised that data centres are only one part of a broader Energy growth story, accounting for less than half of Wärtsilä's Energy equipment order backlog. Wärtsilä believes its engine technology is particularly well suited to the sector, offering high efficiency, operational flexibility, modularity and low water consumption through closed-loop cooling systems.
Beyond equipment sales, data centres also represent a significant long-term lifecycle services opportunity, given the critical importance of uptime, reliability and operational security. While North America remains the largest market today, Wärtsilä is seeing increasing interest globally, including in Europe and Asia. The recent Memorandum of Understanding with Tokyo Gas Engineering Solutions reflects Wärtsilä’s ambition to explore future data centre power opportunities in Japan together with a long-standing strategic partner.
Marine markets continue to show resilience
Wärtsilä also remains positive about the Marine business. Despite geopolitical uncertainty and a softer macroeconomic environment, market activity has remained healthy throughout 2026.
Longer trade routes, vessel rerouting and strategic stockpiling of commodities, particularly following disruptions in the Middle East and around the Strait of Hormuz, have generally supported vessel utilisation and freight rates. Newbuild activity has also remained strong, driven by healthy earnings, positive sentiment and the ongoing need for fleet renewal.
At the same time, decarbonisation remains an important driver of investment decisions across the maritime industry, as shipowners seek more efficient and future-ready vessels that meet evolving regulatory requirements.
Investing for future growth
The strong market environment is also reflected in Wärtsilä's investment decisions. During the second quarter, Wärtsilä announced a further expansion of engine production capacity at Sustainable Technology Hub in Vaasa to support future demand.
The decision reflects confidence in long-term market fundamentals, including electrification, renewable integration, growing balancing power needs, energy security and data centre growth. Once completed, the expansion will increase Wärtsilä's engine manufacturing capacity in phases during 2028 and 2029, strengthening the ability to serve customers across both Energy and Marine markets while supporting future growth opportunities.
Q&A
How important is the balancing power market?
We see balancing power as one of the most attractive long-term growth opportunities within our Energy business. As renewable energy capacity continues to grow around the world, power systems require increasing amounts of flexible generation to maintain reliability and stability when wind and solar generation fluctuates.
We continue to see strong demand for balancing power solutions in the United States, where the market has been developing for several years, but also increasingly in other regions. Australia is a good example, where the transition from coal-fired generation to renewables is creating new demand for flexible thermal balancing capacity alongside batteries. Similar trends are beginning to emerge in Europe, including Finland, where our first balancing power plant is now in operation and helping to demonstrate the value of flexible engine-based solutions.
What supports Wärtsilä's competitive position?
Our competitive position is built on a combination of technology leadership, operational expertise and lifecycle capabilities. We believe our medium-speed engine technology offers strong fuel efficiency, operational flexibility and attractive lifecycle economics, making it well suited for both baseload and balancing power applications.
In addition, we have a large installed base, a global service network and decades of experience supporting customers across energy and marine markets. As more customers become familiar with medium-speed engine technology, particularly through recent projects in new market segments, we believe they increasingly recognise the value of fuel efficiency, flexibility and reliability.
We also see several trends reinforcing the competitiveness of our technology. These include growing demand for flexible generation, increasing attention on fuel efficiency, the importance of water consumption in some regions and the need for reliable solutions that perform well under a wide range of operating conditions.
How flexible is Wärtsilä's manufacturing model?
Our manufacturing model combines in-house engineering, assembly and testing with an extensive global supplier network. We source a significant share of components from trusted suppliers while focusing our own operations on activities where we create the most value.
This approach provides flexibility as demand evolves. It allows us to scale production efficiently while maintaining operational discipline and managing fixed costs. It also enables us to benefit from the capabilities and capacity of our supply chain.
Our ongoing capacity expansion programme is largely based on expanding and optimising existing facilities, including the Sustainable Technology Hub in Vaasa, rather than building entirely new factories. This supports growth while maintaining flexibility and allowing us to respond to changing market conditions over time.
How does Wärtsilä prioritise capacity allocation?
We do not have slot reservation agreements with individual customers. Instead, we allocate capacity for firm orders based on a combination of commercial opportunities, strategic priorities, customer relationships and geographic diversification.
While data centres represent an important and growing opportunity, we continue to serve customers across balancing power, baseload power generation and Marine markets. Maintaining a balanced portfolio remains important to us.
Long-standing strategic customer relationships also play a role in our allocation decisions. Our objective is to ensure that capacity supports sustainable long-term growth across different markets and customer groups rather than being concentrated in a single segment or geography.
How does the company manage permitting-related risks in data centre projects?
Permitting is generally the responsibility of the customer. Wärtsilä's role is focused on delivering the agreed power generation equipment and services.
How is Wärtsilä utilising artificial intelligence?
We see artificial intelligence as an important enabler both for improving our own operations and for creating additional value for our customers.
Internally, we use AI to improve productivity, automate routine processes and support decision-making across the organisation. In some areas, tasks that previously required significant manual effort can now be completed much faster with the support of AI-enabled tools.
At the same time, we are investing heavily in digital platforms, data architecture and advanced analytics that help improve customer outcomes. Through AI and data-driven insights, we can support higher uptime, improved reliability, lower fuel consumption and reduced emissions across both Energy and Marine business applications.
These investments are closely linked to our service strategy. By combining operational expertise with digital capabilities and advanced analytics, we are developing solutions that help customers optimise asset performance throughout the lifecycle of their equipment. We see significant long-term potential in applying AI within the industries we serve and continue to invest in capabilities that support both customer value creation and future growth.
