Siemens confirms à‚£310m UK wind turbine hub

Siemens is to go ahead with plans to build a wind turbine hub in England as part of a à‚£310m ($511m) deal with Associated British Ports.

The German engineering giant will invest à‚£160m in developing two sites – a construction, assembly and service facility at Green Port in Hull, and a turbine blade factory in Paull, both pictured here in an artists’s impression.

UK energy secretary Ed Davey told BBC News this morning that the announcement, which will lead to 1000 jobs being created at two sites in East Yorkshire, was a massive vote of confidence in the country’s wind sector.

He said recent developments in the Ukraine had emphasised the need for diversification of the UK‘s energy mix and made the Siemens (NYSE:à‚ SI) announcement all the more important.

“We heard about Ukraine and that the EU imports a lot of gas from Russia. The UK doesn’t as it happens but it shows we need to diversify our energy mix, we need wind, solar, todal, nuclear and carbon capture and storage, so we are not dependent on any one source. This massive investment in clean green secure energy is part of that diversity, making sure we can tackle climate change and ensure energy supplies are secure.”

Siemens has partnered with Associated British Ports (ABP), which is investing à‚£150m in the project. 550 jobs would be created at the factory in Paull, building 75m-long rotor blades designed for its 6MW turbines, while another 450 jobs will be created at the Green Port Hull turbine construction, assembly and service facility.

Mr Davey denied that recent setbacks for the wind power sector in the UK, such as the scrappage of an extension of the London Array were of any consequence.

“Why do you think Siemens is investing this huge amount of money? They are doing that because it’s a huge vote of confidence in the offshore wind industry in the UK. We have the world’s largest offshore wind farms, we are seen as the best place to invest in offshore wind and we have for example Dong investing $4bn here between now and the end of the decade in offshore wind farms. It is true that not all the offshore wind farms can go ahead but that’s because we cannot afford every project that is put on the table, but we are massively expanding offshore wind and we are the world leaders.”

Davey also said changes to the subsidy regime would have no impact on the country’s attractiveness for the wind power sector.

“The evidence is there for you in the huge vote of confidence in our policies and the fact that we have got a secure regime. If you talk to Siemens or Dong or those types of world-leading companies in this industry they are saying that Britain has the best framework for attracting offshore wind in the world.”

“We also believe we can get the costs down. If you talk to any of these companies they say they believe they can reduce costs by 40 per cent over the next decade.”

The German company had been working on plans to invest à‚£80m, which would have led to 700 jobs, but it has decided to revise its plans, giving a boost to the offshore wind industry.

Siemens said it will be the first manufacturing plant of its kind for its next-generation blade technology designed for wind turbines. Each rotor blade is 75 metres long and when rotating covers an area the size of two and a half football pitches.

Michael Suess, member of the managing board of Siemens and chief executive of energy sector, said: “Our decision to construct a production facility for offshore wind turbines in England is part of our global strategy. We invest in markets with reliable conditions that can ensure that factories can work to capacity.

“The offshore wind market in Great Britain has high growth rates, with an even greater potential for the future. Wind power capacity has doubled here within two years, to roughly 10 GW. By 2020, a capacity of 14 GW is to be installed at sea alone to combine the country’s environmental objectives with secure power supply. Projects for just over 40 GW are currently in the long-term planning.”

UK Prime Minister David Cameron welcomed the deal, calling it “a massive vote of confidence in our long-term economic plan”.

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