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United Kingdom

MHI Vestas committed to UK following CfD update

UK: The UK offshore sector faces an "extremely tough challenge" in reaching cost goals set out for the upcoming contract for difference (CfD) support auctions, according to MHI Vestas CEO.

The UK's first V164 8MW turbine is due to be installed this year
The UK's first V164 8MW turbine is due to be installed this year

However, Jens Tommerup is confident these challenges can be met, he told Windpower Monthly. CEO Tommerup said his joint venture, now in its third year, has invested considerably in the UK and its supply chain.

Indeed, the UK represents a third (32.5%) of the company's pipeline for its 8MW platform.

MHI Vestas V164 8MW current pipeline

Project Capacity Country
UK    
Burbo Bank Extension 258MW UK
Walney Extension West 330MW UK
Subtotal 588MW  
     
Europe    
Norther 370MW Belgium
Borkum Riffgrund 2 450MW Germany
Horns Rev 3 400MW Denmark
Subtotal 1,220MW  
Total 1,808MW  

 

"We are committed to the UK, we are committed to UK offshore," said Tommerup on a recent visit to London.

The company set up a blade manufacturing facility on the Isle of Wight, southern England, shortly after forming the joint venture in 2014. Vestas had used the site, but the joint venture expanded it to accommodate manufacturing of the V164's 80-metre blades.

So far, blades from the plant have been exported to European projects, but with construction of Dong Energy's 258MW Burbo Bank Extension project due to begin this summer, the factory will soon be supplying the UK itself.

In March, the UK finance minister, George Osborne, revealed during the UK budget announcement that £730 million (€935 million on the day of the budget) would be made available "to back renewables" in a series of new auctions by 2020.

The first of the three auctions will have a budget of £290 million, with support for offshore wind capped at £105/MWh (in 2011-12 prices) falling to £85/MWh for projects commissioned by 2026.

Tommerup said he and the industry welcomed the additional details, which have been a long-time coming.

"We appreciated the announcement from the UK government with the budget. We see it as an extremely tough challenge for the industry to reach these cost targets, but it will be possible. We see an industry aligning around bringing down the cost of energy. So that is going to be very positive."

"Of course if we really need to get more suppliers in the UK, we also need to have certainty on the longer term."

MHI Vestas will be hoping to capitalise on the up to 4GW of offshore capacity that could be supported over the three auctions, and extend its pipeline.

"The reason we have been able to build up the pipeline has been our 'open book' policy. We have taken clients in, suppliers in and basically shared good and bad news," Tommerup explained.

MHI Vestas' "open book" policy welcomes suppliers and potential customers to its facilities to demonstrate the technology in-house and show how it is progressing, and it will take feedback in a bid to further develop the turbine and processes.

"In the UK we have employed 250 people in manufacturing. We have spent a lot of resources training our people, and we really see the benefit of it. We will continue training. We have a five-year training programme, so we are really committed to the UK," Tommerup said.

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