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United Kingdom

United Kingdom

CONCERN ABOUT HOME INDUSTRY

The British government wants to see the UK wind industry winning more business, both home and abroad. Foreign wind manufactures setting up production in the UK using local labour is a possible alternative. The main reason for the weak position of the British wind turbine industry seems to be the tight time tables of the contracts awarded under the first two rounds of NFFO.

After years of feigning apparent indifference, the UK government has now acknowledged its concern at the lack of British manufacturing involvement in the country's wind farms. Charles Wardle, the minister responsible for renewable energy, says he wants to see the UK wind industry winning more business, both in the home market and abroad. Failing that, it seems the government would also settle for foreign wind manufacturers setting up production in the UK using local labour.

Only around 40% of the total investment in all the government supported wind projects to date has been met by British suppliers, he told renewable energy industry representatives at a House of Commons reception sponsored by the British Wind Energy Association on December 12. "This represents a great opportunity for improvement." Wardle advised manufacturers and suppliers to start looking hard at this market which is likely to be worth many tens of millions of pounds per annum over the next few years, with the prospect of much more after that. Developers, too, should be looking carefully at what British industry can offer, he said.

Wardle would like to see British industry making a determined play for some of £1 billion per year of new business in the world market. "This applies not only to equipment suppliers but also to all involved in the business, whether developers, investors, insurers or consultants."

The failure of British industry to reap more benefit from the Non-Fossil Fuel Obligation (NFFO) subsidies is an embarrassment to the government. It has come in for criticism over this issue from both the National Audit Office and the Public Accounts Committee. The NFFO was inititially set up by government to support the nuclear industry by obliging the electricity utilities to buy a proportion of their power from nuclear sources, but was extended to include a small tranche for renewable energy. One of the aims of the government's programme for renewables is to encourage an internationally competitive home industry.

The 1998 deadline for expiry of contracts awarded under the first two rounds of NFFO must bear much of the blame for the fledgling British wind turbine industry losing out. Since developers were up against such a tight timetable in which to recoup investment, they looked to more established overseas suppliers who could deliver the quantity of machines they needed within the short time scale. Now the government is apparently anxious to avoid further accusations of initiating another round of breaks for overseas competitors funded by the British electricity consumer.

Build in Britain

The Department of Trade and Industry (DTI) is currently considering what action to take to redress the balance. Many overseas turbine suppliers have already expressed a willingness to consider manufacturing a larger proportion of their machines in the UK. But the extent of their operations in Britain will inevitably depend on how much business they get from the latest round of NFFO contracts. In the meantime the DTI is quietly talking to developers, manufacturers and the British Wind Energy Association to encourage a greater uptake of home-grown technology in NFFO 3 projects. However there is a limit to the overt support any government can lend to home suppliers because of international trade regulations.

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