House of Commons Speech – 24th May 2011
Sheerness Wind Turbine Factory
Gordon Henderson (Sittingbourne and Sheppey) (Con): Two weeks ago the Danish company Vestas announced that it had signed an option for 70 hectares of land at the port of Sheerness. That option opens up the possibility of Vestas setting up a factory in my constituency to manufacture its next generation wind turbine, the V164-7.0. Vestas is considering locating in the UK because of the immense growth prospects for offshore wind-generated energy in this country, but let us not be under any illusions: Vestas has plenty of alternative options on the continent.
Vestas has already made a substantial investment just to secure the land option in Sheerness, and I am convinced that it is ready to move that option to a full lease as long as it sees firm commitments from customers. Of course, potential customers will not be willing to provide those buying commitments unless there is sufficient market and regulatory certainty to ensure a long-term viable business case. I am calling on the Government to provide that certainty and to create the conditions that would enable Vestas to secure the orders for the V164, which would give it the confidence to turn the option for land at Sheerness into a full lease, start building its factory and create much needed jobs in my constituency.
I have already discussed the situation with Vestas and it is looking for a number of assurances from the Government before sealing the deal. It wants to see a support mechanism that is specifically adapted to the needs of the wind industry, as opposed to trying to make wind fit within a one-size-fits-all solution. Such a support mechanism is key to making offshore wind a long-term, cost-competitive component of the energy mix, and needs to be designed very quickly and set at a level that drives continued investment from Vestas customers. In addition, Vestas need reassurances that the UK’s offshore wind ambitions will not be moderated. It wants to see mechanisms in place to avoid any prolonged hiatus in investments as a result of the electricity market reform proposals. It wants the Government to set firm and ambitious targets, specifically for offshore wind generation, and not only to 2020, but beyond to 2030. Finally, it wants timely decisions on planning applications not only for offshore projects but for the enabling infrastructure, such as grid connections and substations, which would provide more market certainty and increase investor confidence.
If Vestas sets up its factory on Sheppey, an estimated 2,000 direct jobs and 1,000 indirect jobs will be created. On behalf of all those in my constituency who would benefit from those jobs, I would like to ask several questions. First, how do the Government plan to provide Vestas with the necessary conditions that would encourage it to make that major investment in the UK? Secondly, what are they doing to overcome the obstacles that the offshore wind industry faces? Thirdly, what are they doing to ensure that investment like that proposed by Vestas comes to the UK and does not go to countries such as Germany or France, which no doubt would welcome it with open arms? Fourthly, how can the UK maintain its position as global leader in offshore wind energy and secure the jobs and economic benefits that go with it?
Fifthly, why are the Government opting for an electricity market reform package that appears to be focused on getting new nuclear power stations off the ground, rather than putting more emphasis on getting investment into renewables? Sixthly, given that the Government’s £60 million so-called ports fund, which is supposed to help upgrade port infrastructure to meet the needs of the offshore wind industry, applies only to areas with assisted status, how do the Government intend to create a level playing field so that we in Sittingbourne and Sheppey can secure Vestas investment for an area of high deprivation that just happens to be located in the so-called wealthy south-east? Finally, what can the Government do to help de-risk the potential investment by Vestas? I appreciate that those are not questions to which my right hon. Friend the Minister has ready answers, but I very much hope that he will ensure that the relevant Minister provides a response as a matter of urgency.
The Parliamentary Secretary, Office of the Leader of the House of Commons (Mr David Heath): The hon. Member for Sittingbourne and Sheppey (Gordon Henderson) is someone else whose constituency I feel I know much more about than I did a few weeks ago, having replied to a debate with him only recently. I know how important the Vestas investment in Sheerness on the Isle of Sheppey is to his constituents. He asked me a series of questions, but accepted that I would probably be unable to answer him. He is absolutely right—I cannot—but I will ensure that his questions are communicated to the relevant Minister. What I can say is that the Government are talking to Vestas about how to assist the investment that it is thinking of making. There is a problem, in that the £60 million is not available because Sheerness is not an assisted area. There are EU state aid rules and there are difficulties getting around them, but the Government are very keen on assisting the investment, as the hon. Gentleman is, and I hope we can do everything possible to make it a reality.