Kintyre has, of course, seen it all before with Vestas decamping and Skykon failing, both at the turbine tower manufacturing plant at Machrihanish.
Scotland at large has seen a deal with Korea’s Doosan to build a research facility and factory in Renfrew dropped in December 2011. This was followed by the recent news that another major player in the wind renewables business, Spain’s Gamesa, lured here by subsidy (as are they all), was laying staff off instead of building up its base.
Back only in March this year, Gamesa left Tyneside in the lurch and chased a better subsidy to Scotland, with the promise of a large manufacturing plant at Leith. It signed a memorandum of understanding with Forth Ports as it dumped Tyneside.
However, this enticement away from Tyneside was not orchestrated by the Scottish but by the UK government, in an effort to shore up the pro-union vote. The North East was simply the sacrificial pawn in a bigger game.
Gamesa had promised 1,000 jobs in Tyeside. Its offer to Scotland was more modest – 180 jobs for £1.5 million of public money to locate here, made less than a year ago. With the start of redundancies revealed by The Herald on 26th June, who would bet on Leith ever seeing a manufacturing plant?
Now, yesterday – 1st July 2012, it has been announced that global giant, Vestas, is in trouble with a debt burden and is borrowing heavily.
A major sign of imminent trouble came only two weeks ago when Vestas pulled out of its multi-million pound 70 hectare development of a wind turbine plant at Sheerness Docks in Kent.
Vestas and its would-be partner in the enterprise, Peel Ports, owner of the port – and of Clydeport, made the shock announcement without explanation. That was a hoped for 2,000 jobs down the pan. It was also an indication of the depth of trouble at Vestas.
With its market value down to £700 million after a series of profits warnings and going into the red after the second of these in January this year, Vestas has had to borrow £242 million, almost 35% of that current value.
The company’s lenders – including RBS and HSBC, have instructed it to prepare a thoroughgoing financial restructuring plan and have appointed Ernst & Young as their advisers on the matter, with Vestas taking on PWC to help get it into shape.
There appear to be two option under consideration, one is the sale of some of Vestas’ assets; the other is the sale of the company itself, with Chinese, American and German interests said to be in the frame.
Just as Gamesa has trailed betrayals from Tyneside to Leith, Vestas has done the same. After leaving its workers in Campbeltown in the lurch, following the subsidy dollar to the Isle of Wight, it went on to close a factory there, with another 400 workers made redundant.
Serious investors in a serious industry are there for the long haul. These are fly-by-night carpetbaggers, grabbing and running in an ‘industry’ thrashed into existence simply because the subsidies were there; and governments were desperate to achieve carbon emission targets.
Now, in harder economic times and in the context of the onset of researched realism on the limited value and high cost of wind energy to the consumer, both available subsidies and potential demand are shrinking.
The trouble, broadly speaking, is that each of the two camps on the wind energy issue refuse to countenance contrary evidence and distort other evidence to advance positions which have nothing to do with renewable energy.
Each camp has its honest Joes, those who are evangelists for wind as part of the answer to a moment when we will not have enough power to satisfy our current usage; and those who are aware that there is a shallow and inadequate research base on each of the multiple areas of risk of the implementation of such energy plants.
The trouble for Scotland with the pro-wind camp is the untrammelled optimism with which the notion of renewables – and of wind in the first instance as immediately realisable – has been embraced and quickly hard wired to the independence prospectus.
This has led intelligent folk at all levels to shackle their understandable passion for independence to an unthinking commitment to wind at all costs.
This is matched by an equivalent percentage of Nimbys in the otherwise honourably concerned anti-camp.
This situation shames reason.
We are looking at a industry which is not an industry so much as a gold rush, with prospectors queueing up to present to Community Councils on what they can do for them – for a hefty percentage – in facilitating a local wind farm; pitching to farmers and landowners to assist – for a hefty percentage – in the supply of one or a very few wind turbines on their land.
We are looking at a government almost routinely overruling planning rejections of wind farms by local authorities.
And all of this is happening in the context of a national grid infrastructure almost wholly unable to deal with it. There has never been a larger cart built before any prospect of the motive power to draw it.
The environmental case, from the need for toxic rare earths in the production of magnets for the turbines, to impacts on wildlife and on the wildernesses which are Scotland’s USPs in its one surefire and present industry – tourism, does not stack up.
The financial argument does not stack up either, with the cost of the subsidies paid to attract the fly-by-nights borne by the taxpayer; and the cost of the payoffs to communities in wind farm areas and the high cost of eventual decommissioning added to the energy tariff to be paid. And whho believes that the eventual decommissioning of wind farms will be anything like complete?
The energy argument is thin with wind unable to provide more than a part of our energy – yet wind farm installations are going ahead willy nilly with no apparent research base on the total volume of contribution we should not exceed or on the ideal sharing of such plants around the country.
Like the Yukon, the pattern of wind farm locations is led by the territory the developers stake out. ‘Those who cannot remember the past are condemned to repeat it.‘
Wind energy was never going to be a long-stay industry because it is recognised as an imperfect interim supply solution until something better – more reliable and more efficient – turns up.
No one is in wind for growth or permanence in any serious sense. When it comes to decommissioning, the companies responsible will not be there to do it. They don’t intend to be. The current phase is no more than a source of quick rich pickings but those sources are becoming constrained and the pickers are sizing up their options.
The current position of Vestas, as a worldwide sectoral giant, could not be more indicative of the need for a major re-evaluation of what we are doing, with far cooler heads and more objective regard to evidence than has yet been the case.
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