April 19, 2012
Scotland

Doosan halts Scotland plant plan as it retreats from offshore wind

Ben Backwell, Copenhagen & Dominique Patton, Singapore; Recharge, www.rechargenews.com 18 April 2012

Korean industrial giant Doosan Power Systems has halted plans to enter the offshore wind sector and build turbine assembly plants in Scotland, citing a lack of confidence in the market, Recharge can reveal.

Doosan had planned to launch a 6MW offshore wind turbine onto the market in 2015 and spend £170m building an offshore wind research centre in Glasgow, with a turbine factory to follow.

“In light of the European sovereign debt crisis, Doosan Power Systems reluctantly decided in December 2011 to postpone its plans to enter into the offshore wind market and subsequent investment in offshore assembly plants in the UK,” the company says in a written statement after enquiries by Recharge.

It adds: “The uncertain economic situation in Europe has created general liquidity issues, as well as sapping market confidence – putting a question mark over the future development of the offshore wind market.”

Doosan says that it is delaying investment in offshore wind “until economic conditions are more stable”.

However, industry experts say that the decision means that the company is likely to be out of the market for good, given that an increasing number of players have developed, or are developing, large-scale offshore turbines to be deployed over the next few years.

Doosan – a major equipment manufacturer for the coal, gas and nuclear sectors – is a relative latecomer to the wind business. It began developing a 3MW offshore model in Korea in 2004.

Last year, Doosan said it would not abandon its 3MW platform, but was ready to pour its full engineering and financial resources into the 6MW model – aggressively pursuing orders for Round 3 offshore projects in the UK.

The company wanted a 6MW prototype ready by 2013, four demonstration projects in the water by 2014, and fully-tested turbines ready for sale by 2015.

It had planned to make 200 turbines a year at its UK factory “as a minimum” by 2015. At the time, Doosan officials said that their business plan assumed that the Korean group would be one of the top four or five players in the sector by 2020.

The decision was made in January, but industry sources say that the move was kept quiet at the request of officials from the Scottish government – apparently because of concerns that an announcement would be negative publicity ahead of the May 3 local elections.

A spokesman for the Scottish government insists there was no attempt to suppress news of the Korean company’s withdrawal, adding: “These incorrect claims have been rejected by Doosan Power Systems.

“Clearly we want as many manufacturers as possible to establish offshore renewables operations in Scotland, but not every energy company can be involved in offshore wind.

“We are working extremely hard to secure positive investments in this area and since the turn of the year, when Doosan took the decision not to pursue offshore wind, both Samsung and Gamesa have announced their intention to develop and manufacture their next-generation turbines in Scotland. We are optimistic that further prospective investments currently being pursued will come to fruition,” adds the spokesman.

“Doosan’s operations are not limited to offshore wind, and the firm is involved in a range of exciting energy technologies that could provide us with significant opportunities for future investment. The Scottish government and its agencies will be delighted to continue working with this prestigious company on any such opportunities that may arise in Scotland.”