Vestas, a Danish company, said it would no longer proceed with its flagship Sheerness project amid concerns about political support for wind power in Britain.
The company’s withdrawal will be an embarrassment for the Government, which had cited the Sheerness factory as evidence of new green jobs being created in the UK. Ed Davey, the Energy Secretary, last week described wind power as a “strategic industry of national importance” on which Britain’s “clean energy future depends”.
The company last year promised to build the factory if the Government gave it “long term political certainty” and there was “stability in the market”. It would have been one of the largest offshore wind turbine factories of its kind in Europe. But Vestas yesterday said it had not received enough orders and hinted the industry had not had sufficient political support from the Government. “We are following the political situation very closely,” a Vestas spokesman added. “The right political decisions are needed in order to support the market for offshore wind energy in the UK.”
Ministers are preparing to cut subsidies for onshore wind farms by up to 25 per cent, and there are concerns that generous handouts for offshore wind farms could follow suit.
The decision to pull out of the factory is the second time Vestas has opted out of the UK market in recent years. It closed down a plant making onshore turbines on the Isle of Wight in 2009, with the loss of 400 jobs.
The decision of Vestas to withdraw from the Sheerness project clearly shows that wind power is not a viable source of energy without huge government subsidies. Vestas reported on May 2 a first-quarter net loss of 162 million euros ($205 million), almost double its deficit a year earlier and close to triple the estimated low in a Bloomberg survey of eight analysts.