MHI Vestas: Brexit Will Not Deter Investment in Britain's Wind Sector

By Susanna Twidale and Nina Chestney
Thursday, March 7, 2019

Japanese-Danish joint venture MHI Vestas plans to continue investing in its wind turbine blade manufacturing plant in Britain, despite the country's impending departure from the European Union, its chief executive told Reuters.

MHI Vestas, a venture between Denmark's Vestas Wind Systems A/S and Japan's Mitsubishi Heavy Industries, makes wind turbine blades on the Isle of Wight, off the southern English coast.

Some 76 percent of the turbine blades made at the site in 2019 will be exported to projects in Europe but Philippe Kavafyan said the company was not worried about the prospect of a hard Brexit which may see export tariffs applied.

"We don't have a scenario where we adjust our strategy, even in an extreme Brexit," he said.

The company plans to double production capability at the site and is seeking to add around 380 more employees which will take the total number to around 750, Kavafyan said.

Analysts at Wood Mackenzie said this week a hard Brexit could see default World Trade Organization tariffs averaging 2.7 percent on imports and exports of offshore wind technology components.

However, Kavafyan said costs are expected to continue to fall in the offshore wind sector, which would likely mean the industry would be able to offset any tariffs from savings made elsewhere.

"I am convinced we will see more reductions across the value chain of the technology," he said.

Britain is the world's biggest offshore wind market, accounting for almost 40 percent of global capacity.

Earlier on Thursday, the government announced a so-called sector deal of support for the industry including a pledge to hold contracts for difference (CfDs) auctions every two years which guarantee generators a minimum price for renewable electricity.

Kavafyan said this support system gives companies the confidence to push forward with multi-billion pound large-scale wind projects regardless of Brexit.

"Even a low strike price provides a buffer so you don't have negative power prices like in Germany," he said.

Contracts in 2017 offered prices as low as 57.50 pounds per megawatt hour (MWh) compared with about 150 pounds/MWh in 2014, and are expected to be lower at the next auction to be held at the end of May.

Costs have fallen in part due to larger turbines, with have lower installation costs per megawatt of capacity. 

(Reuters, Reporting by Susanna Twidale and Nina Chestney; editing by David Evans)

Categories: Wind Power Offshore Energy Renewable Energy

Related Stories

Iran Brings South Pars Gas Platform Fire Under Control

Oil Prices Slide as Trump Signals Pause in Iran Strikes

Murphy Oil Secures Six Offshore Israel Licenses Near Leviathan Gas Field

Aramco’s Building in Riyadh Damaged by Houthi Attack

Production Restart at Australian Offshore Fields Boosts Jadestone's Oil Output

Woodside Exit Sends East Timor Searching for Greater Sunrise Partner

QatarEnergy Signs Supply Deal for LNG from Woodside's Louisiana Project

Strohm Nets Ultra-Deepwater Supply Deal for Southeast Asia’s Gas Scheme

Energy Drilling Lands $87M Drilling Job Offshore Malaysia

Fugro Adds More Survey Work off Timor-Leste

Current News

First Oil Flows from Vietsovpetro's Platform Offshore Vietnam

Iran Brings South Pars Gas Platform Fire Under Control

Oil Prices Slide as Trump Signals Pause in Iran Strikes

Murphy Oil Secures Six Offshore Israel Licenses Near Leviathan Gas Field

VAALCO Advances Côte d'Ivoire Offshore Exploration Ahead of 2028 Drilling

Aramco’s Building in Riyadh Damaged by Houthi Attack

ADES Lands $117M ONGC Drilling Contracts for Two Jack-Ups

Velesto’s Jack-Up Rig Up for Drilling Job with Petronas

Tender-Assist Rigs: Southeast Asia’s Quiet Workhorses Head for Full Utilization

Aker Solutions Lands Major Role in Qatar’s Offshore Oil Field Revamp

Subscribe for AOG Digital E‑News

AOG Digital E-News is the subsea industry's largest circulation and most authoritative ENews Service, delivered to your Email three times per week

https://accounts.newwavemedia.com