Wind energy investment at stake as firms fear government opt out

UK Energy Secretary Ed Davey

Billions of pounds' worth of investment in Britain's energy infrastructure is on hold 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 newspaper that 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 £100m 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 (OMX: VWS), 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 2000 jobs.

Mitsubishi, Gamesa and Siemens FWB: SIE, NYSE: SI– 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.

Matthew Chinn, managing director of Siemens Energy for the UK and north-west Europe, whose company is planning a £210m factory that would employ 700 people in Hull, on top of its £500m 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.

Akio Fukui, chief executive of Mitsubishi Power Systems Europe, which is mulling an investment of more than £30m in research and development in Britain, said: "Commitment from the government to proceed is vital. If the government commits, then investors will come."

Jim Smith, chief executive of SSE Renewables, said the political furore surrounding wind was unhelpful at a time when billions in foreign funds were needed to build clean technology schemes. "Clearly what the industry needs is clear, consistent government policy and anything that potentially upsets that is not good for the industry," he said.

While most companies said they wanted to push ahead with their investment plans, some investment bankers also expressed concerns. Simon Brooks, vice-president of the European Investment Bank, which provides backing for some UK wind farms, said the letter to Cameron "injects a bit of uncertainty", which was bad for investment.

The energy secretary, Ed Davey, said yesterday: "A responsible energy policy for this country is one that rules in all of the key low carbon technologies to help us keep the lights on and emissions down. Ruling any of them out would be folly."

For more power policy and regulation news



Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now

Whitepapers

Maximizing Operational Excellence

In a recent survey conducted by PennEnergy Research, 70% of surveyed energy industry professional...

Leveraging the Power of Information in the Energy Industry

Information Governance is about more than compliance. It’s about using your information to drive ...

Reduce Engineering Project Complexity

Engineering document management presents unique and complex challenges. A solution based in Enter...

Revolutionizing Asset Management in the Electric Power Industry

With the arrival of the Industrial Internet of Things, data is growing and becoming more accessib...