Danish wind-energy company Vestas Wind Systems A/S is reconsidering plans to make more turbines in the UK after a government auction for offshore wind failed to attract any bids.
(Bloomberg) — Danish wind-energy company Vestas Wind Systems A/S is reconsidering plans to make more turbines in the UK after a government auction for offshore wind failed to attract any bids.
“A factory is not going to be built in the UK until we have a clear predictability of the demand side,” Chief Executive Officer Henrik Andersen said in a phone interview. “The UK, instead of being a leader toward the offshore industry, has now become an average country.”
Offshore wind — the country’s most successful alternative source of energy to fossil fuels and key to meeting net zero targets — failed to win any contracts in this year’s auction. Developers had warned that increasing financing and supply chain costs meant government-set electricity prices in the auction were likely to be too low to underpin building projects.
Andersen said the UK government should meet with the private sector this afternoon to either “fast track” a sixth auction round, which is scheduled for next year, or create a new “round five and a half.” Last year, offshore wind won the bulk of the new capacity at record low prices.
“The projects are there, the gigawatts are there, it now just needs a price adjustment,” the CEO said. “By increasing capacity you are increasing the supply and therefore you are bringing the electricity prices down rather than keeping it at this high level.”
Read More: UK Wind Auction Fails, Deepening Offshore Industry’s Troubles
The Danish company already operates a UK factory on the Isle of Wight, where it produces turbine blades. However, Vestas is now looking at Poland and the Baltics to build new capacity, Andersen said.
“Poland has a very predictable outline of both auctions and allocation of wind in the offshore industry,” he said. “We can’t have factories covering both onshore and offshore, so now we are just making decisions on where to expand the footprint.”
Last month, Vestas agreed to provide wind turbines for a 1.2 gigawatt offshore project with Baltic Power off the cost of Poland in the Baltic Sea. Further details will be disclosed “if and when the agreement translates into a firm and unconditional order,” the company previously said.
–With assistance from Jessica Shankleman.
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