Wind turbine maker to axe 600 jobs

By Fiona Harvey, Environment Correspondent
Published: April 29 2009 03:16

One of the biggest renewable energy manufacturers in Britain announced on Tuesday it is to cut more than half its UK jobs – blaming the government for failing to support the sector.
In a grave blow to the government’s ambitions to create a “green” export industry, Vestas, the world’s biggest maker of wind turbines, will axe about 600 of its 1,100 UK employees, probably closing its factory in the Isle of Wight and cutting jobs elsewhere in the UK.
Ditlev Engel, chief executive of Vestas, told the Financial Times: “We had been planning additional investment in the UK [because of government targets to increase renewables]. But the UK is probably one of the most difficult places in the world to get permission [for wind projects]. We can’t afford to keep on this capacity.”
The blow comes less than a week after Alistair Darling trumpeted the role of low-carbon industries in job creation, announcing new funding for renewables in his Budget.
Mr Engel said the cuts were not the result of the recession – the company’s order book had recovered and he predicted 20 per cent growth in 2009. The reason was rather the inability of the government to deliver the conditions needed for renewables growth.
“There are two sets of politicians, Whitehall politicians and local politicians,” Mr Engel said. While the former group encourages renewables, which bring new jobs, local politicians tend to oppose wind farms, meaning few are built.
Green zeal fades
Businesses are losing their enthusiasm for environmental issues, just as the government is ramping up its efforts to combat global warming, a new poll suggests.
More than eight in 10 companies think the government’s targets of cutting emissions by 80 per cent by 2050 are unattainable, according to a survey of 300 UK businesses by RWE Npower, the energy company. The poll was carried out before the Budget when ambitious emission cuts were set out.
Exchange rates, which have made imports of wind turbine components from Europe more expensive, also played a part in Vestas’ decision, Mr Engel said. “The UK currency has dropped significantly against the euro, which has made things difficult.”
But the main reason, he said, was the problem with building renewable energy in the UK. Although the UK has the best wind resource and the most generous subsidy system in Europe – paid for by electricity consumers – it has failed to generate the volumes of electricity necessary to meet European Union targets, which will require 35-40 per cent of electricity to come from renewables by 2020, against about 5 per cent today.
Mike O’Brien, minister at the Department of Energy and Climate Change, sought to play down the significance of the job cuts. He said: “It’s clear that Vestas recognises the potential of the UK wind market. Measures set out in the Budget will offer renewed support to the wind industry and help move potential projects towards construction, which could mean more business for Vestas.”
He said the government would be offering support to those affected by the redundancies.
But, making clear that he believed Vestas would continue to retain a production base in the UK, he added: “Vestas have indicated the steps we have taken [in the Budget] will have a positive influence on the possibility of them producing blades in the UK.”
Blades are the single component of turbines that Vestas makes in the UK. Other parts are imported.
Copyright The Financial Times Limited 2009