GROWING MARKET OFFERS CHALLENGING OPPORTUNITY

A fair ?

The market represents considerable potential for UK component suppliers. Mike Nash has been in search of reality amongst the political hype

he Government has just published ‘The cent,as many component makers already spent £9.4 million TRenewables UK Supply Chain Gap supply parts to foreign-made wind redeveloping the site,with Analysis’in an attempt to gauge the turbines.And turbines alone account investing £3 million extent of supply chain opportunities for for over half global equipping the plant,with the UK companies (see page 3 ). So can the investment between 2002 to 2007. latest additions costing £1.4 UK’s engineering sector become a “Wind Force 12”,a recent report, million. significant supplier of components and says wind turbine manufacturers are Another example is sub-assemblies to wind turbine building a base in the UK.The Germany’s DeWind (now manufacturers? Well,Machinery found ‘Country Attractiveness Index’, both optimists and pessimists. produced by Ernst & Young,shows the First the numbers.Europe will UK to be the most attractive to these account for 90 per cent of the total global companies,based on its large 1 2 market of £8 billion (900 MW per annum) unexploited wind resource,an of wind power investment by 2007,with evolving planning attitude,long-term the UK accounting for a full one fifth of market security and attractive pricing global investment between 2002 and under the Renewables Obligations 2007 – second only to Germany, Certificates (ROCs) program according to The World Offshore (electricity suppliers must produce report 2002-2007. certified evidence that they have With European production at full sourced a specified proportion of capacity,this is an opportunity to make supply from renewables). inroads into a market traditionally And there are success stories. dominated by Danish and German wind Argyll and the Islands Enterprise 4 turbine makers manufacturers. (AIE) has helped Vestas Wind The optimists first. Clearly,there’s Systems’subsidiary,Vestas-Celtic potential for UK manufacturers in the Wind Technology,which makes case of turbine towers and blades, super-MW turbines at its tower 3 generators and transformers,gearboxes, manufacturing and turbine assembly clutches,brakes,power control systems Machrihanish plant on the Mull of and even entire wind turbines. Kintyre in Scotland. In August 2003, Currently,of all the wind turbines AIE committed another £410,000 operating in the UK,only around 5-6 per towards continued development of cent are locally manufactured,although the facility,including £184,000 from the proportion containing UK-made the Highlands and Islands Enterprise Wind turbine – Major components components is estimated to be 43 per Efficiency Programme.AIE has

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part of FKI) which has transferred announced its second round of projects – are prudent and cautious people.” production to Loughborough. In addition of the first two,Hoyle is almost complete Confidence is everything in a highly to assembly,it precision machines major and Scroby Sands underway. competitive market. Component components such as main shafts,sub suppliers must produce output bases and hub castings.And NEG Micon RELIABILITY RULES conforming to specification,delivered on makes blades and rotor assemblies at its In terms of turbine component supply, time and at the right price. Reliability is two plants on the Isle of Wight and at while the UK performs well,it does not do crucial,especially with the major part of Thorpe in Surrey. so at the high-value end. Generators and the wind market expected to be offshore. Cambrian Engineering,which towers are made here but production of Tom Pederson,managing director of manufactures towers,has just opened a complex components will almost Vestas-Celtic,believes “the trend for new facility at the Arnish shipyard to add certainly remain on the continent in the turbines is for greater capacity”. He is to its existing presence in Bangor, short- to medium-term. equipping his plant with the although initial high hopes have met Vestas-Celtic told Machinery that it infrastructure to deliver the V80 turbine, reality and work is flowing more slowly would source “more standard products” much larger than previous models and than first thought. from the locality whilst still importing having a 2 MW capacity. And so now,the reality check. Danish more complex components from The inference is that suppliers will and German manufacturers may want to Denmark. David Rowland,managing also have equip with larger machines to establish fabrication,assembly and director at DeWind,puts it more bluntly. accommodate larger components,both manufacturing facilities in the UK,but the “Am I about to produce my next dimensionally and,in the case of towers, general consensus within the industry is generation turbine with a UK thicker and heavier materials,says Chris that they won’t do it until they are manufacturer of gearboxes?”he asks Bagley,programme manager for power at convinced that the UK has an ongoing, rhetorically.“No! Because there aren’t TWI (formerly The Welding Institute),the consistent wind power market and the any!”Remember too that “the wind power materials joining and science assurance that there is a stable regime market has had a very chequered history,” development organisation. and flow of projects.While this is he points out.“In the early days,there Technology transfer offers a way in beginning to happen,it is important to were big problems with gearboxes. So for some firms. For example,while there acknowledge that the UK has only just there is a lot of caution – turbine makers are not many UK companies involved in tower fabrication,large-scale fabricators in the maritime and oil rig sectors are used to building tubular structures 56789101112 offshore – “it is a market they can move into,”reports Mr Bagley.“The difficulty is to get guys to realise they could move into the wind power market from associated industries,”he laments.With help from the DTI,TWI is doing its part by researching ways of improving tower fabrication techniques to speed up production and reduce cost. It also supports vertically integrated supply chains consisting of 18 OEM,‘widget makers’and users. Regional funding from the North East and South Yorkshire helps it identify supply chains in these areas. However,whilst Mr Bagley has a list of component requirements for 15 16 17 the sector including everything from access systems to lubricants,“we have not 1 Spinner 7 Gearbox 13 Yaw done anything as yet to set up a supply 2 Rotor hub 8 Brake disc 14 Yaw gear chain best practice guide”. 3 Blade 9 Brake caliper 15 yaw ring TWI also gets Regional Development 13 14 4 10 Coupling 16 bedplate Agency (RDA) funding to help SMEs and 5 Main bearing 11 Generator 17 Canopy is actively involved with business links, 6 Main shaft 12 Meteorological sensor 18 Generator fan local business support agencies to bring together a database of SMEs having an

www.machinery.co.uk ● MACHINERY 6 February 2004 9 interest in steel structures,composites or There is little incentive,apart from cost unlikely that the job target will be flat sheet metal.TWI will then mailshot reduction or performance enhancement achieved”. and hold seminars to introduce the wind to switch to UK suppliers.“There is DeWind is bucking the trend, industry,often via an OEM saying what it nothing that says to any developer ‘you investing in the UK with a high UK looks for in suppliers.TWI is also helping must use turbines with a high UK content’ content making rear base plates, to set up in the North East a Renewable or that benefits manufacturers to get generators,machine components, Energy Manufacturing Technology Centre suppliers involved at the vital front-end converters and control panels. But it still for wind energy steel structures. Mr development stage.”This market is pretty imports nacelle covers (covers on top of Bagley’s message to fabricators? “Lobby ruthless,with material cost making up a the tower) made from GRP. “DeWind FKI your RDAs and business links.” large part of final price,hence the owns its own moulds but they are in pressure to get costs down which means Germany,”reports Mr Rowland.“I am keen POLITICAL PERSPECTIVE looking at the global market.“The only to have a supplier in the UK. But why Then there’s politics.Turbine makers way we would change suppliers is if there should I transfer that tool to the UK to don’t necessarily have a problem with is a market driver to do so,”Mr Rowland another supplier when they can’t make this as they are used to the highly adds.“If developers received a few ‘extra them for a competitive price?”Why aren’t political market. For example,in the points’for utilising high UK content that they competitive? “They are trying to do second round of projects,developers had might sway a planning decision,then what the German and Danes did 10 years to give an indication of UK content. developers would automatically drive the ago.They lag behind in knowledge and However, trouble for UK manufacturers is marketplace into considering greater UK experience.”The answer? You have got to that European procurement directives content. kick-start and incentivise the market. forbid a specific direction on UK content. “The Government has stated that it For offshore projects the phraseology was wants to generate 20,000 new jobs and REGIONAL INITIATIVES that developers had to be open with their has created some fantastic drivers to The potential of wind power is not lost on intention,but the reality is that develop wind farms.That’s great news for RDAs seeking to attract new investment manufacturers can source from us but as there is no mechanism in place to their patch.The RDAs do differ anywhere they want. to incentivise turbine manufacturers to significantly in their degree of readiness For Mr Rowland,this is the problem. source components in the UK,it is very but there is general willingness to support contract manufacturers within the supply chain in facilitating ‘clubbing together’to supply a more comprehensive offering – say a sub-assembly.This is deemed a more attractive proposition as it reduces the supplier base and administration requirements for the wind turbine maker and offers more scope for innovation for the supplier. Generally,the RDA’s role is mostly about knowledge transfer and export support,plus addressing skill issues, identifying supply chains and providing information,linking together UK Trade and Investment,skills councils and business links.“We don’t have pots of cash to throw at a new facility,”one RDA told Machinery.“But we do have the ability to join up the information for anybody looking at the region.” Here we summarise how far along the path various regions have come. ❐ West Midlands – manufacturers already hold established positions with products such as bolt-tensioning equipment,high-speed shaft couplings and special castings,all currently being All photos and cover, courtesy AG and cover,All photos Nordex courtesy

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exploited by wind turbine makers.There is a potential supplier base of over 1000 companies identified. RDA Advantage Wind power contacts West Midlands and the Midlands Advantage West Midlands – MEB, David Middleton, 0121 693 8331 Environmental Business (MEB) Company East Midlands – Eric Boultbee, 0115 988 8533 are keen to bring together companies to Renewables East – Nick Fleming, 07905 869989 form clusters supplying sub-assemblies Renewables UK – David Rodger, 01224 254104 and is working to extend the West South East England Development Agency – Nicola Loweth, 01483 500728 Midlands supply chain to additional South West of England – Keith Gillanders, 01392 229394 companies and a wider range of products TWI – Chris Bagley, 01223 891162 and services. Yorkshire Forward – James Beal, 0113 394 9765 ❐ South East – the South East Development Agency (SEEDA) is currently funding a feasibility study into a maintenance for offshore.” approval to fund the Yorkshire & Humber community owned wind turbine facility ❐ East of England – Nick Fleming at Future Energy Company – £500,000 per on the Isle of Wight,in co-operation with Renewables East believes his region annum for three years of funding to the Isle of Wight Council. Other projects offers one of the best opportunities for capture the economic benefit in future include strengthening supply chains and offshore development with the recent energy.“At present we only have five wind clusters in key renewable energy second round of licenses announced for farms,but I know many MWs are coming technologies. Nicola Loweth, operation in the Wash and on line.” Environmental technology sector estuary. ❐ East Midlands – Eric Boultbee, manager at SEEDA,reports that the South “We are actively consulting with the energy & environment manager for the East has substantial expertise in a range consortia involved,”offers Mr Fleming. East Midlands Development Agency has of high-value manufactured products and “We tell them:‘there is a need for you to seen in the last year DeWind brought to services,throughout the supply chain for engage with the region’”,he says. Loughborough. Current clustering marine renewable power generation and “Ultimately they will be looking for initiatives include,with the West grid supply.A project is due to start early services from the region – we want to see Midlands,helping suppliers to the 2004 to encourage suppliers and research as much of the potential economic automotive sector to transfer skills into teams to cluster and collaborate. growth from these projects as possible the wind turbine market. Mr Boultbee has ❐ South West – Keith Gillanders, resulting in manufacturing inside the East a list of such companies which is being business development advisor at of England.”Mr Fleming cites Lowestoft promoted to firms such as DeWind ,and RegenSW,the South West Renewable and Great Yarmouth as the major growth is hoping to attract “big turbine makers Energy Agency allied to the South West of areas,where there is an oil and gas globally to get them to come here so it England RDA,states that by 2010,his industry.His advice? “Come and talk to us. becomes a centre for the industry”. region will boast a total onshore wind – if a contract manufacturer is thinking of The RDA has also funded the capacity of 324-418 MW.A further 50 MW diversifying into this market we can set Environmental Industries Forum to will be offshore.“That translates for out the issues,bring in a manufacturer to specifically promote companies in this onshore to £6-800,000 per MW”,of show how it goes about sourcing and area.And the potential? “There are many investment but more offshore.The region tendering.”Professionals are on hand to wind farms in planning at the moment,” has “not had much exposure to the advise so manufacturers can make an Mr Boultbee reports.“The East Midlands market”,but does boast expertise in informed decision whether it is a new has quite a long coast line,including composites and marine structures. business opportunity. parts of the Wash and the Lincolnshire First priority for contract ❐ Yorkshire Forward will see fens.The whole area has been mapped manufacturers is to get on Mr Gillanders’ something to the tune of £330-405 million for potential.”Coastal installations will be database of suppliers,be they marine invested by end 2007.According to James the main growth area. “We see all experts,pneumatic or hydraulic Beal,sustainable development manager – renewable energy as important to this electronic control systems suppliers. energy:“We have the advanced region.We have targets – we are very pro From this a potential developer can see engineering and manufacturing cluster wind energy as an agency.If there are the region’s capability.There are sizeable and see many technologies we are companies coming in to make wind gaps in the region’s supply chain. His supporting being transferable to wind.” turbines or components then we will message? “People who don’t think of One initiative is virtual enterprise welcome them with rotating arms!” themselves as suppliers to this industry networks for wind,consisting of So the message for firms wishing to should think again – there is a lot of numerous SMEs established to put in joint get involved is to make contact (box potential,particularly in operations and bids. Mr Beal also confirms he has board above). M

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