The UK government is offering £6m to the wind turbine maker Vestas in order to encourage the company to continue some operations in the south of England.
The company announced in March its intention to close its factory on the Isle of Wight – the only facility of any size making wind turbine parts in the UK.
This new £6m – which Vestas has not yet agreed to take up – would not save the factory, or the 600 plus jobs there.
It would fund, instead, a new development – a research and development facility for Vestas to experiment with making offshore wind turbines. If that facility went ahead, it could create up to 300 jobs.
But investors might ask themselves – what is really the point of that?
The loss of the UK’s only major wind energy manufacturing facility will be a disaster for the hopes of the UK’s fledgling green industrial sector. Meeting the European Union’s targets of generating 20 per cent of energy from renewable sources by 2020 will require the UK to generate 30 per cent of its electricity from renewables – mostly wind, because other technologies are not ready, are too expensive or too hard to implement.
This will cost about £100bn, almost all coming from the private sector, and will be paid for in higher electricity bills to consumers and industry. The government hopes that this investment will not just generate new green power for the UK, but kickstart an export industry that will generate hundreds of thousands of new green jobs.
It’s a nice idea. The reality is rather different.
Restrictive planning laws and organised opposition to wind turbines mean there is no possibility of building the thousands of wind turbines needed on land. Instead, attention has turned to building them at sea – hence the government’s offer to Vestas.
What are the prospects of building a strong export industry in offshore wind turbine component manufacturing?
The UK has the world’s biggest installed capacity of offshore wind turbines. With little more than half a gigawatt of offshore wind generating capacity installed. For comparision, China built more than 6 gigawatts of onshore wind capacity last year alone and is expected to build much more this year.
The UK is also, the government admits, expected to be the biggest market for offshore wind for many years to come.
Why is this?
Offshore wind costs three times as much as onshore wind. Putting turbines at sea is hard – they have to be more robust turbines, for a start, and they are harder to set up and maintain. They generate a bit more power, but not enough to make up for the pain of getting them at sea and ensuring they keep turning, as well as connecting them to the grid on land.
Most of the rest of the world is simply not interested. Wind companies have overwhelmingly voted with their feet – the big growth markets for new turbines are China and the US, countries with huge open spaces available where companies can thrust up new turbines where they like, free from nimby attacks.
Almost the only people in the world pushing offshore wind are the UK government.
There is no export market for UK-built offshore wind turbines and in all likelihood there never will be. Few other countries are interested – only those with little land to spare, a bit of coastline and a deep green tinge are likely ever to be in the market.
When your biggest export markets are likely to be Belgium and the Netherlands, you have to worry.