Monday, 27 February 2012

#Wind #energy companies fear UK government's commitment is cooling

Billions of pounds' worth of investment in Britain's energy infrastructure is on hold or uncertain because of concerns over the government's commitment to wind energy.

In an exclusive survey, the heads of some of the world's biggest wind companies, which have been considering setting up factories, research facilities and other developments in the UK, have told the Guardian they are reviewing their investments or seeking clarification and reassurances from ministers on future energy policy in the wake of growing political opposition to wind energy that culminated in this month's unprecedented attack on the government's policies in a letter signed by more than 100 Tory MPs.

General Electric (GE) Energy's managing director, Magued Eldaief, told the Guardian his company's proposed wind manufacturing investment – amounting to at least £100 million directly but worth much more in its knock-on effect to the economy – was "on hold" pending ministers' decisions on future reforms to the energy market.

"Our investment is on hold until we have certainty and clarity regarding the policy environment that we are in," Eldaief said. "One of the most important things for us is political certainty, so we can justify the business and investment case for a facility in the UK. But we think there are some [political] headwinds which do not help, especially in terms of the subsidies discussion."

He added that the recent anti-wind activity was "certainly a concern". He said: "It's something we're watching very closely. We would like clarity and we would like it as quickly as possible."

Vestas, the world's biggest wind turbine maker, said it was waiting to see whether its customers were able to sign orders before committing itself to build a proposed turbine factory in Kent that would create about 2,000 jobs. Mitsubishi, Gamesa and Siemens – all potential investors in offshore wind to the tune of hundreds of millions of pounds – also expressed concerns that an anti-wind power backlash was building up in UK politics, after the MPs' letter to the prime minister called for subsidies to be slashed and cast doubt on the value of wind energy.

Ditlev Engel, chief executive of Vestas, warned that if the political mood shifted against wind, the company would be forced to rethink its UK proposals. He said: "If things should change, my customers will not be able to sign orders – and that is a prerequisite. We will only go ahead if we have firm, unconditional orders – we will only get orders from our customers if they are sure that the development [of windfarms] can go ahead.

"The most important issue that our customers have is a long-term policy framework – that is required to put in these investments, which are huge … [But] we have not had reassurance from the government."

Matthew Chinn, managing director of Siemens Energy for the UK and north-west Europe, whose company is planning a £210 million factory that would employ 700 people in Hull, on top of its £500 million in existing investments, said the firm saw a perceived lack of enthusiasm for wind power as "very significant", although it wanted to push ahead with its plans.

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