Wind Business: Business Digest

Vestas shifts production focus

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Denmark's Vestas is now a household name in the UK after a torrent of press and media publicity surrounding the closure of its blade factory on the Isle of Wight and related Southampton facility, in the south of England, with the combined loss of 425 jobs. Workers staged protests which lasted 18 days at the Isle of Wight factory and rallies were organised in other British towns after the company announced it was pulling the plug on the UK's largest facility for manufacturing wind turbine components. Vestas chief executive Ditlev Engel blames a not-in-my-backyard attitude and the notorious British local planning process for blocking the UK market from becoming large enough to support continued manufacturing in England.

"There is a difference between the aspirations of government and local councils and local politicians," he says. Engel points out that plans to build a wind farm on the Isle of Wight had been thwarted by the local council, despite Vestas' presence there. The closure is part of the company's north European cutbacks in production, specifically in the UK and Denmark, where a total of 1567 jobs have disappeared. Vestas is expanding rapidly in the growing US and Chinese markets. All the 40-metre blades produced in recent years on the Isle of Wight have been shipped to America, but with Vestas opening up manufacturing in the US, continued exports from the UK are not justifiable from an environmental or cost perspective, the company says. Vestas abandoned plans to convert the factory to manufacture 44-metre blades for larger turbines.

Meantime, Vestas is to expand its research and development facility on the Isle of Wight with help from an incentive of more than £6 million from the UK government. The new blade technology centre will design, manufacture and test prototypes of the world's largest wind turbine blades, it says. Forty employees from the factory are to be redeployed to the centre to swell staff numbers there from 110 today to 150 by the end of the year.

Investors attack complacency

Investors are blaming the indifference of the Japanese government for causing the most tech-savvy nation on earth to fall behind in developing infrastructure which is key to developing wind power. Investment analysts working for Japanese investment bank Nomura have warned that Japan's technological supremacy in electricity distribution has led to complacency in developing a network of computer systems and sensors to gather real time information on electric power flows, the scientific core of the nebulous smart grid concept. The analysts argue that such a system makes wind power more viable. The sensors map power demand allowing wind turbine output, which varies with the weather, to be banked in batteries and redistributed to areas when and where it is needed.

"Pioneer Japan could get left behind," Nomura says in its summer report on smart grids. Japan's transmission and distribution networks are already among the most efficient and reliable in the world, say the analysts, due to substantial investment during the 1990s. But investment yesterday has led to complacency and inertia today, the analysts warn. This is in sharp contrast to the United States' focus on grid improvements through President Bush's Grid 2030 program and President Obama's Green New Deal, Nomura argues. Similar action has been taken in the European Union, it adds. Both the US and EU have targets to roll out their so-called smart grids by 2020, although they are still working on the regulatory framework that will make it possible. "We expect momentum to grow for the introduction of smart grids in Japan," the Nomura analysts say. "(But) current efforts are trailing those in the US and Europe by a considerable extent, and Japan could get left behind in the drafting of legislation and technological standardisation needed for the introduction of smart grids." But the analysts have reassured Japanese technological companies that there still remain opportunities to sell sensors and other smart grid hardware to European countries and the US.

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