Blowing, but in which direction?
It's not a big name in Britain's renewable sector, not yet anyway. But Gamesa is blowing into Britain with a lot of money to invest, and you can expect to hear more about it.
That's because the UK's ambitious plans offer huge potential for companies wanting to get into offshore wind farming, and partly because subsidies in its home market are being cut as part of the Iberian austerity drive.
Madrid-based Gamesa has chosen London as its operational headquarters for offshore power - because that's where the money is, and deals get done - and today announced Glasgow as its engineering and design centre, bringing 130 jobs.
That's significant for Glasgow, because it makes it the third major company - also Iberdrola/ScottishPower and Scottish and Southern Energy/Mitsubishi - to put such a centre of expertise into the city.
It's when an industry cluster offers different employers in one location that people are more likely to move to it. And Glasgow is becoming a centre of expertise in the engineering, design and managing of offshore renewables.
Silvery Tay turbines
The memorandum of understanding just signed between Gamesa and Scottish Enterprise, Dundee Council and Forth Ports, owner of Dundee docks, is a long way from creating the 170 jobs being highlighted with the announcement.
That's the starting position for Gamesa to see if it can get a deal it likes to set up its logistics, maintenance and possibly a manufacturing facility on Tayside.
The Spanish managers are waiting to see what money they can expect from the Scottish government. The Glasgow deal is still awaiting sign-off of some grant funding, and the Dundee plans revolve around the release of at least some of 拢70m, spread over four years, which ministers have put aside for developing port facilities for the offshore boom.
Meanwhile, there are conflicting signs around the renewables industry. If you head down the North Sea coast to Humberside, there's good reason to celebrate a huge investment by German turbine-maker Siemens. Up to 10,000 jobs could be created there.
But in Aberdeen, Subocean, which lays offshore cables for the renewables industry, has gone from very rapid growth to the brink of collapse.
Skykon, the Danish company that took over the Machrihanish turbine plant on Kintyre, ran into financial problems, and while work continues, its long-term prospects are unclear. Sea Energy has been trying to sell its renewables division for months, having been successful in winning the right to develop offshore, but not the funding.
The lessons: one is that, while the offshore boom could bring many billions in spending, the pipeline for contracts is not looking good for the next two or so years. Companies need to have patience, and very patient lenders, if they are to be around for the returns on vast up-front investment.
Another is that Aberdeen, established for 40 years as energy capital of Europe, risks losing out on the offshore renewables boom, because it's in the wrong place, and perhaps also because it's relatively expensive. The biggest of the offshore windfarms are in the shallow water off the coast of England, and much closer to Humberside than they are to Pittodrie beach.
It may blow lots off the coast of Scotland, but it doesn't necessarily mean the jobs will blow in that direction.
Hullo, I'm Douglas Fraser, and I'm business and economy editor at 大象传媒 Scotland. Welcome to my blog, where you can read my take on money matters, viewed from a Scottish perspective.
Comment number 1.
At 21st Jan 2011, redrobb wrote:Ok, afore the juggernaught of spin & hype kick-off. Count the jobs! then count how many longterm unemployed numbers. This announcement like all the other similar ones are not even fit enough to be called scraps at the table! I've always said that when they build a new motorway section in england they generally get 4 lanes, meanwhile anywhere else is lucky to get a dual carrige-way, well I'm sure the A9 will happen 2020. Take a look at the numbers of new jobs created outwith this tiny little pocket of the UK, given our heritage we should have hundreds of thousands employed in this sector, I cringe to think what we really do have!
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Comment number 2.
At 21st Jan 2011, Zincan wrote:Why are the European renewable companies setting up shop in UK? Well, David Cameron, like his predecessor, believes that wind energy is the way to go. There鈥檚 a huge building programme on the table, and various indirect subsidies to pay for it. The indirect subsides aren鈥檛 plain to see because there is relatively little 鈥淕overnment Money鈥 being directly introduced to the projects 鈥 the subsidies are in fact given by every householder in UK because the renewable energy is sold to the supply companies at significantly more per Kilowatt/hr than the Nuclear and Coal fired generators get for their supplies - i.e. we've all had increased fuel bills to pay for wind power.
So with all this offshore development you鈥檇 expect UK companies to be getting a significant piece of the action鈥.er no! For example, Thanet offshore Windfarm is currently the biggest in Europe and started generating at the end of last summer. It鈥檚 owned/operated by a Swedish company. The turbines were supplied by Vestas (Danish) and the ongoing maintenance contract will mean that Scandinavians, not Brits will get the long term work. The complex electrical hook up was again undertaken by Scandinavians (apparently UK didn鈥檛 have anyone skilled enough). The UK subsea cable installation company (Subocean) was effectively robbed when a significant part of the work was handed over for completion to yet another Scandinavian company.
When the UK Energy Secretary visited the Thanet site for the official opening he was told that less than 20% of the manpower involved in the project was British: it was later revealed that for the larger London Array Wind Farm which is currently being installed, the British manpower involvement would be less than 15%.
So, how about some checks and balances? When will the UK Government realise that this mega vision which is being funded by every British household is providing very few jobs to ease British unemployment?... and that allowing foreign companies to buy up established factories in UK and close them down a couple of months later (e.g. Vestas, Isle of Wight) just wouldn鈥檛 be allowed to happen in Scandinavia. So far it鈥檚 been a great industrial revolution just given away to foreign companies who have blatantly protected the interests of their own national workers. Proper UK Government audits would identify these problems and retain, if not expand jobs for British workers.
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Comment number 3.
At 21st Jan 2011, kaybraes wrote:Why does " will cost the taxpayer " spring to mind every time green energy is mentioned ? As you point out, Iberia is cutting back on subsidising pie in the sky projects which may or may not deliver energy to the punter. Plundering our misguided subsidies is the obvious attraction, not a desire to help Scotland achieve energy self sufficiency. Maybe we should also be reducing subsidies, but this would maybe put the efficacy of wind and wave power into perspective. I know no way of producing energy is free or cheap , but wind and wave power I suspect will be considerably more expensive to deliver than coal or nuclear generated power ,which will be more sustainable and longer lasting. While fashion and pandering to the green lobby might be fine if you can afford it, cost and deliverable power must take precedence .
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Comment number 4.
At 22nd Jan 2011, Wee-Scamp wrote:#2. Zincan asks
Why are the European renewable companies setting up shop in UK?
Because there is no competition here. We didn't invest in developing wind technology and set up turbine manufacturing companies so as with most other tech stuff we have to rely on others.
It's a bit like the mobile phone business. The UK is supposed to be the biggest user of mobile phones on the planet but we don't of course manufacture them.
Pathetic isn't it.
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Comment number 5.
At 1st Feb 2011, electricityforfree wrote:This comment was removed because the moderators found it broke the house rules. Explain.
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