Vestas hones in on Scotland for new wind turbine factory

Vestas Wind Systems A/S (CPH: VWS) is looking at Scotland for a new wind turbine factory, reviving its plans to expand in the UK after the country significantly raised support prices for the offshore wind industry.

Vestas is talking to officials for an area that has “immediate access to the sea and close to a large harbour that could very well be in Scotland,” Chief Executive Officer Henrik Andersen said in a phone interview Thursday.

The Danish wind-energy firm had earlier said it would reconsider expansion in the UK after an auction for offshore wind failed to attract any bids.

The comments follow the British government’s ramping up the support price for new offshore wind farms to revive investment in a crisis-hit sector crucial to its climate goals.

The new guaranteed ceiling price will be £73 ($91) instead of £44 at the latest auction round.

Vestas already operates a UK factory on the Isle of Wight, where it produces turbine blades.

“We allocate and reallocate resources and there will be some manufacturing that sits better and closer to a bigger harbor,” which Scotland could provide, Andersen said.

He said that the Isle of Wight was a technology hub for the company. However, he has earlier talked of problems with that location, including a lack of direct access to the water.

Vestas’ business depends on projects placing orders and high financing and component costs have weighed on the renewable energy sector globally, making it hard for developers to secure financing for profitable projects.

With companies now willing to pay more for wind turbines, Vestas is working its way back to profitability.

A greater volume of new orders is helping the company expand production.

“The North Sea is probably the most attractive area in the world for offshore wind,” Andersen said, adding that it’s now up to the UK government to increase the next auction to eight to ten gigawatts, including the volume that could have been allocated in the last round.

“But there’s still a long way to get to 50 gigawatts by 2030,” he said of the UK’s government’s target for the industry.