Plans to make the world’s largest wind turbines in Britain, creating 2,000 jobs, have been put in jeopardy because of faltering demand and technical problems.
Vestas said a year ago that it would build a factory in Kent to supply giant turbines the height of the “Gherkin” tower in the City of London for the extensive wind farms in the North Sea that are planned towards the end of the decade.
But its chief executive said yesterday that the Danish company might decide not to go ahead with the proposal because of the “very challenging” market outlook for the next 18 months.
Ditlev Engel told The Times: “The decision to go ahead with the new facility is dependent on orders for this new machine. It’s clear that the market outlook issues are a concern for us.”
Vestas found itself under a barrage of criticism three years ago after closing its manufacturing plant on the Isle of Wight, England’s only wind turbine factory at the time.
The company, the world’s largest manufacturer of turbines, also said yesterday that it would delay tests of the giant new offshore turbines it had hoped to make in Kent by a year to 2014. The seven megawatt machine would be able to produce enough electricity to power 6,500 homes when the wind blows, almost 50 per cent more than anything already built.
A senior executive involved in a similar wind farm project said that developers would need to see several years of successful operation from the giant turbines before committing to orders. The one-year delay announced yesterday would make it even harder for Vestas to secure orders in time to justify building the Kent plant, he said.
Asked what the likelihood was of going ahead, Mr Engel said: “I do not want to put it into percentages.”;
The plant at the site of the former naval dockyard of Sheerness is one of several proposed by manufacturers in Britain. Gamesa, Siemens, General Electric and Mitsubishi have all drawn up similar plans but most are dependent on receiving sufficient orders. Yet concern is growing that cash-strapped energy companies will not be able to find the investment to build giant offshore wind farms and place sufficient orders with factories.
Describing the news as “clearly unwelcome”, Kevin Coyne, national officer for energy at the Unite union, said: “We are worried about the fate of these projects, with energy companies not having much money to invest and lack of confidence in the sector.”;
Shares in Vestas slumped by 10 per cent yesterday after it announced losses of €162 million, up from €85 million the previous year and almost three times more than expected. The company blamed delayed orders, the higher costs of new turbine models and overcapacity. Its shares have dropped by more than two thirds in the past year and are worth a tenth of their value four years ago.
In the past six months Vestas has issued two profit warnings and in January, after a boardroom overhaul, announced plans to cut 2,335 jobs.
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