Closure of turbine factory takes the wind out of Britain's low-carbon sails

• Environment Company boss blames 'nimbys' for sales slump• Budget measures seen as last glimmer of hope

Tim Webb
The Guardian, Wednesday 29 April 2009

Britain's only wind turbine manufacturing plant is to close, dealing a humiliating blow to the government's promise to support low-carbon industries.
Vestas, the world's biggest wind energy group, said yesterday it would close its Isle of Wight plant, which employs about 600 people and makes blades for windfarms in the US.
Announcing the move, the boss of the Danish company delivered a scathing attack on "nimbys" and the planning system, blaming them for holding up projects and causing paralysis in the industry. The company also pointed to "a lack of political initiatives [to support the wind industry]" and the weak pound. "It is extremely time-consuming and extremely complicated. Some of our developers, customers, will tell you it is so difficult. In the UK nimbyism is a huge challenge," Ditlev Engel told the Guardian.
The group had planned to convert the factory in Newport in June to make blades for the British market, but said yesterday that orders had ground to a halt. The low demand could not justify the investment, Engel said.
He said the group would consult workers for the next two to three months, and investment in the plant may still go ahead if orders picked up soon.
Engel said last week's budget, which increased subsidies available for offshore windfarms, as well as recent moves to free up the sluggish planning process, could boost the industry but it was too early to say whether orders would pick up enough to rescue the plant.
"The government has tried to improve the situation," he said. "Whether it's enough I don't know."
But the company's financial statement for the first quarter, released yesterday, blamed the credit crunch, a depreciation of sterling and "a lack of political initiatives" for the planned job losses.
The TUC called on the government to do more to protect "green jobs and skills". The union body's general secretary, Brendan Barber, said: "The loss of these jobs on the Isle of Wight would not only be a blow to the emerging green sector, but would also be a personal tragedy for the hundreds of workers affected locally."
Engel admitted that if Vestas makes its workers redundant it would be harder to reopen the plant if orders pick up, because it would have to find a new skilled workforce.
Vestas is also cutting just under 1,300 workers in Denmark. The group, which after the cuts will employ about 20,000 people worldwide, reported yesterday that profits had more than doubled in the first quarter of the year, to €76m (£68m). While scaling back operations in Britain and Denmark, Vestas said it was expanding manufacturing in the US and China where it said demand was higher.
In early March, Gordon Brown convened a low-carbon industrial summit aimed at finding ways to help the sector's manufacturers lead Britain out of recession. Vestas representatives attended.
Engel said the group was in "constant dialogue" with the government and had informed it of yesterday's move. He admitted that no aid or assistance had been offered by the government to try to save the plant. But he reserved his fiercest criticism for local politicians and "nimbys" who he said were holding up projects, particularly onshore, giving Britain one of the lengthiest planning processes for windfarms anywhere in the world.
"Since last summer, the order intake in the UK market has dropped significantly. Therefore it would be very difficult to substantiate the investment as we had already planned.
"The UK has large wind resources and it's a priority for the government but the orders didn't move. That's why we're telling employees that we're not reinvesting there.
"We are waiting to see in the coming period if the government initiative announced last week will get the market to move again. At least it gives some hope but it's too early to tell."
Engel said the weakness of the pound had also had an effect, making it more expensive to build windfarms in Britain, but the main problem lay in planning applications.
"People talk about big offshore parks. Why not put in onshore parks? The cost of installation is half compared to offshore."
The Isle of Wight facility will stop making blades in June. The R&D department, which employs about 150 people, will remain open.