The German engineering giant Siemens has confirmed that it will invest in a major $560 million plant that could create up to 1000 jobs in the port city of Hull.
The United Kingdom’s burgeoning offshore wind industry received the major boost, after Siemens confirmed long-awaited plans to invest millions in the turbine production and installation plant in Hull.
Following months of speculation, the German engineering giant announced it would double the money it planned to invest in the factory to $290m, while port operator Associated British Ports confirmed it would invest a further $270m in the so-called “Green Port Hull” scheme.
British environmental news website BusinessGreen reports construction work on the two sites at Hull and nearby Paull in Yorkshire is due to start this autumn, creating up to 1,000 jobs.
Siemens said it will produce its next generation six megawatt (MW) machines at the site from 2016 to supply Round 3 offshore wind farms.
BusinessGreen reports the announcement represents a major breakthrough for the UK’s plans to retain its leading position in the offshore wind market.
Siemens has been working on plans for a UK turbine manufacturing plant for four years.
However, fears had been mounting that it would shelve the project, after the UK government scaled back its expectations for how much offshore wind would be installed over the coming years.
Last year, the government confirmed that it expected 10GW of offshore wind capacity to be in the water by 2020, compared to the 16GW it had previously predicted.
Concerns over the future of the project were further stoked last week when Chancellor George Osborne announced that he would freeze the UK’s carbon price floor tax through to 2019, a move that critics warned would undermine the investment case for clean energy projects.
BusinessGreen reports the impact of the decision and the accompanying $13bn package of compensation measures for manufacturers and heavy industry may have helped reduce prospective energy costs for the new plant.
Michael Suess, chief executive of Siemens Energy division, said he expected strong growth rates from the offshore wind sector, predicting that Britain could still install 14GW by 2020 and up to 40GW in the long-term, a level of deployment that would justify multi-million dollar investments in a domestic wind energy manufacturing industry.
“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,” he said.
Britain’s Conservative Prime Minister David Cameron said the news was “a massive vote of confidence” in the government’s long-term economic plan.
Secretary of State for Energy and Climate Change Ed Davey similarly welcomed the announcement, arguing that the announcement showed that the government’s offshore wind strategy was helping to deliver jobs as well as new low carbon energy supplies.
Maria McCaffery, chief executive at trade association RenewableUK, said the decision was a major coup for the British wind industry.
“It’s the green-collar jobs game-changer that we’ve been waiting for,” she said. “Attracting a major international company like Siemens to the UK, creating 1000 jobs manufacturing turbines at two sites in Yorkshire, proves that we can bring the industrial benefits of offshore wind to Britain.”
