Zhitong Finance learned that Danish wind energy company Vestas Wind Systems (VWSYF.US) is reconsidering plans to produce more turbines in the UK. Previously, the investment promotion for offshore wind power projects held by the British government failed to attract any bids. The company's chief executive, Henrik Anderson, said: “We won't be building a factory in the UK until we have a clear predictability of demand. The UK is no longer a leader in the offshore industry; it has now become an ordinary country.”
Offshore wind power is the UK's most successful alternative to fossil fuels and the key to achieving the net zero target, yet it failed to win any contracts in this year's investment auction. Developers have warned that rising financing and supply chain costs mean that electricity prices set by the government in auctions may be too low to support construction projects.
Anderson said that the British government should meet with the private sector this afternoon, either “rapidly advance” the sixth round of auctions scheduled to be held next year, or launch a new “fifth and a half round” auction. Last year, offshore wind gained most of the additional production capacity at record low prices. Anderson said, “The project is there, and the gigawatts of installed capacity is there. Now we only need to adjust the price. By increasing production capacity, you can increase supply, so you can lower electricity prices rather than keep it at this high level.”
The Danish company has opened a plant on the Isle of Wight in the UK to produce turbine blades. However, Vestas is now considering building new production capacity in Poland and the Baltic States. Anderson said, “Poland has a very predictable outline for the auction and distribution of offshore wind power. It's impossible for us to have both onshore and offshore plants, so now we're just deciding where to expand our footprint.”
Last month, Vestas agreed to partner with Baltic Power in the Baltic Sea to supply wind turbines for a 1.2 GW offshore project. The company previously said it would disclose more details if the agreement turned into a firm and unconditional order.