UK windfarm contracts heading overseas

The utility companies reckoned to be the biggest winners in this latest offshore tendering round were all German - Eon, RWE and Siemens. Centrica are the only British owned group with a majority stake in any of the winning consortia.

Of course, that's not such a problem for UK plc as long as UK businesses can get their hands on a fair share of the supply chain contracts - you can guess what's coming.

The omens aren't great. It was revealed last year that over 90% of the £1.9 billion earmarked to build the London Array - the biggest windfarm in UK waters to date - is being spent overseas - let me repeat that, 90% not spent in the UK.

Naturally, the developer Eon is required by law to use strict competitive tendering procedures and it blamed lack of suitable UK suppliers. But it is all the more revealing to discover that of the relatively paltry £160m or so being spent in Britain on the London Array, the bulk of it is being spent with the Manchester-based UK subsidiary of Siemens.

It's not the first time our Government's claims for a green jobs revolution have been brought into question. The decision last year by Danish company Vestas to move its turbine manufacturing facility in the Isle of Wight to the US was much publicised.

So, how do UK businesses get a piece of the action with these latest offshore windfarm schemes?

These new schemes are on a different scale to what's gone before, as are the opportunities. The technical challenges, although immense, offer huge scope for R&D and innovation - something UK businesses are renowned for - even some law firms!

In an early sign of what's hopefully to come, the Government recently awarded a grant to US-based Clipper Windpower to build a prototype mega-blade in Hartlepool - for a turbine the height of the Gherkin in London.

Renewable energy projects don't come bigger than these offshore windfarm schemes and we need Midlands businesses to rise to the challenge. They must leverage the expertise and skills of the world class research teams in our region's universities and become the 'go to' people. We also need to address the need for skills training, especially mechanical and civil engineering - and quickly - but that's for another blog.

We also need more support from the Government to match the fine talk. They must offer support packages that encourage the world's leading turbine manufacturers to establish facilities here in the UK. We must not end up making the same mistake with offshore as happened with our onshore wind industry, which has no domestic manufacturing base to speak of and a dependency on imported turbines.

The truth is that UK energy consumers will ultimately end up picking up the tab for the decarbonisation of our power sector and these large offshore schemes; whether with higher taxes or higher energy bills, or probably both. It will be unforgivable if UK businesses and the communities they support do not benefit from this enforced largesse. There, as promised - a good dose of British pessimism.