OFFSHORE Supply chain challenge

How will UK sub-contractors succeed in penetrating the wind power market and get their share of the huge investment being made in Britain’s latest offshore industry? Steve Webzell reports

here are currently 19 operational the onshore wind market have and blades is a perceived UK weakness. Toffshore wind farms in the world. established supply chains that are DWL says it is vital that the UK supply According to Douglas-Westwood Ltd extremely hard to infiltrate for chain is galvanised into developing its (DWL – www.dw-1.com), business component suppliers. The fact that there established capabilities to service this research specialists for the energy sector, is no turbine supplier with a large-scale emerging sector and that the required this translates as 327 turbines providing manufacturing plant in the UK at present levels of investment are made. At present a total of 617 MW. For now, Denmark is is a further barrier. the emergent nature of the offshore the world leader in installed capacity Unfortunately, the UK’s FKI Group wind sector is reflected by its somewhat with 426 MW of the total, but the UK is withdrew from this market in July with disparate supply chain, which is advancing fast. It now has 124 MW the sale of its German DeWind activity. characterised by a high cost base and operational with a further 180 MW Prior to this, there had been high hopes relatively static capacity. If the sector is to coming on-line before the end of 2005. for related manufacturing at its fully develop it is vital the supply chain In fact, over 10 GW of offshore wind Loughborough site. EU Energy plc, achieves the requisite cost reductions capacity is currently planned off the UK Milton Keynes, an alternative energy and increases in capacity. coastline, which is expected to account group, and India’s Shriram EPC have Such support must begin by assisting for over £11.2 billion in expenditure in jointly acquired the DeWind activity via companies to understand how they can the coming few years. EU Energy Shriram. enter the supply chain for offshore wind Recent work completed by DWL has projects and develop both their position analysed offshore wind supply chains, WHAT UK PROGRESS? within the supply chain and offering to with particular focus on the East of So are UK sub-contractors making any the industry, says DWL. This can be England region. Two of the government’s inroads? Well, some, although achieved through the dissemination of three offshore wind strategic manufacturing is not strongly information regarding market development areas (Thames Estuary and represented. According to DWL’s opportunities and potential means of Greater Wash) are within the East of recently launched Offshore Wind Supply market entry. England’s area of influence and the Chain Study for the East of England (part Further initiatives are also required in region is, therefore, well positioned to of the Pushing Offshore Wind Energy facilitating the capture and propagation capitalise on future projects, says DWL. Regions – POWER – initiative), the of lessons learnt throughout the supply In fact Lowestoft College has just Scroby Sands project now operational chain in both project implementation revealed it has become the UK’s first off the coast of Great Yarmouth and product innovation. It is also Centre of Vocational Excellence for represents a total capital expenditure of essential that business support agencies Offshore Technology, which will £80 million. It is the largest offshore continue to insert potential suppliers complement the town’s planned in the UK to date. into the by Offshore Renewables Centre, due to be Around 70 per cent of the value of initiating a high level of business-to- operational by 2007. contracts awarded for Scroby Sands business contact and dialogue. Penetrating the offshore wind supply related to the procurement and The final fundamental area of chain has been found to be difficult for manufacture of components and business support required within the UK UK companies. The highest value offshore installation. Of a total value of relates to the facilitation of potential component, the , is sourced approximately £56 million, around inward investment and the development overwhelmingly from the continent. £19 million (34 per cent) was sourced of infrastructure – roads, rail etc. Danish and German turbine from within the UK, although It may be tough to get a seat on the manufacturers are the market leaders disappointingly only £291,000 from the bandwagon but there are some notable and through many years of dominating East of England. Manufacture of nacelles successes. For instance, Grantham-based

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BGB Engineering has become an established producer of phosphor bronze slip rings for manufacturers including , Bonus and . The company is now using its recent investment in a Rüsch 290A CNC bandsaw supplied by ADS Precision to cut cycle times by 50 per cent. The machine has also allowed BGB to reduce machining allowance, which is important when the material costs as much as £1 a millimetre! Works director David Gilbert claims that the company is now Europe’s marker leader in the manufacture of slip rings for wind turbine pitch controls. So how has this been achieved? “We got in 12 years ago,” he says. “We were trying to sell slip rings to turbine manufacturers before they realised they needed them. It’s all about having the vision,” Mr Gilbert explains.

PERSEVERANCE AND TENACITY Entrepreneurs with foresight of this nature are of course exceptional. For most mortals, perseverance and dedication can pull it off. This has been proved by County Durham-based ESP Plastics, which has been making front plastic bosses for turbines erected in the UK and overseas for the past year. Similarly, a Birmingham-based foundry and machining group that wants to remain anonymous has developed what it describes as a ‘significant’ business manufacturing machined iron castings that are used to fix wind turbine blades to the hub. Others are proactively trying to gain access to supply chains. Stockton-on- Tees-based JG Tinkler recently attended a wind supply workshop supported by Renew Tees Valley to investigate the possibility of becoming involved as a steel fabricator for wind turbines. Not all, however, find it easy to get involved. Both Coventry-based Theocrest and Technicraft of Woodbridge cite lack of market insight, information and

Oliver Burston:Oliver Debutart contacts as barriers to entry.

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According to Mr Turner WindSupply has already had some successes on Tough but worthwhile products such as electrical slip rings, blade root castings and fasteners for One of the initiatives devised by WindSupply to help gain access to the supply blades/hubs. In addition there are many chain is to take a delegation of its registered companies to the wind energy companies progressing business in exhibition in Husum, Germany (www.husum-wind.de). Taking place this year on products such as composite structures, 20-24 September, WindSupply will be taking 20 UK companies to exhibit on its tower sections and brakes. WindSupply stand, as well as organising two-day missions for those that want to evaluate the has also created a series of Product market with visits to the Vestas and REpower factories nearby. Innovation Groups that concentrate on One of the companies attending last time was Coventry-based Squires Gear & one particular part of the turbine, such Engineering Ltd. “The exhibition proved successful in terms of talking to other as the rotor hubs, drive trains or suppliers and companies involved in this vast industry,” explains Doug Squires. composites. They bring manufacturers “With manufacturing in need of a major boost in the UK, maybe wind energy, at together with turbine OEMs to discuss some future point, will bring us the opportunity we all need, but it won’t come product developments, while input from easily!” He adds that a wind turbine tower contains about 4.5 tonnes worth of universities and research organisations is bolts and studs – “just a small percentage of this business purchased from UK also available. suppliers would be nice.” Squires is keen to quote on 36 mm double-ended bolts, in particular – these secure blades to the rotor head. INTEREST REGISTERED Many proactive manufacturers have already registered with WindSupply, The goods news is that there is a Turner takes up the story: “When such as Stockton-on-Tees-based Harkers growing band of organisations armed WindSupply started out on this project Engineering, which is interested in with public funds that have been around two and a half years ago we machining hubs, base plates and appointed to help. One such commissioned research in Germany and gearboxes. The company is also in organisation is Renewables East Denmark to explain the market to us: regular contact with Renew Tees Valley (www.renewableseast.org.uk), which Who was making what? Who were the (www.renewteesvalley.co.uk), which is recently introduced 40 companies from main suppliers in the supply chain? What involved in promoting renewable energy the East of England to a delegation from were the main components needed? We and the benefits it has to offer. In a Danish wind turbine giant, Vestas, which then profiled the existing German and further step, Harkers is also collaborating now has the largest slice of the turbine Danish companies in the wind turbine with One North East in trying to develop market (around 37 per cent) following supply chain and then overlaid this on to the infrastructure required to bring an its recent acquisition of NEG Micon. a UK database to pick out similar types of OEM to the region. Sceptical companies dismissing the event businesses.” Naturally, a major boost to UK wind as ‘public relations’ need to think again. Across the UK, the WindSupply supply opportunities would be for a exercise identified 8,250 companies. Not wind turbine manufacturer to set up a SERIOUS ABOUT BUSINESS all of these will actually be suitable factory here. Encouragingly, WindSupply “Vestas did not come here for the sake of suppliers, either not having the correct knows of two major OEMs that are it,” declares managing director of type of equipment, capacity or just the considering the move to compensate for Renewables East, James Beall. “They enthusiasm to develop this new market. European factories at full capacity. But, came because they want to improve “Our estimate is that around 4,000 to Mr Turner says, it will be big orders for production methods by using 5,000 manufacturing companies could UK wind farms that attract them. competitive manufacturers located close play a role in the supply chain,” concludes And that’s guaranteed: to hit UK to offshore installations. A local supply the organisation’s Mr Turner. targets of 10 per cent of electricity from chain would offer Vestas more WindSupply is now working with renewables by 2010, WindSupply production options, reduced logistics Regional Development Agencies in the estimates 15,000 wind turbines are costs, shorter shipping times and greater West Midlands, East Midlands, required (both offshore and onshore) – access to new ideas and innovation.” Yorkshire and North East, and is at present there are around 1,200. ■ Another initiative that is making a progressing communications with the ❐ Other useful weblinks include: valuable contribution is WindSupply companies highlighted in these regions www.renewablesnorthwest.co.uk; (www.windsupply.co.uk), a not-for-profit before adding them to a supplier www.scottishrenewables.com; exercise managed by the Business Council database accessible on the website: www.restats.org.uk/UK_renewable_ for Sustainable Development. Supply around 400 companies have now been policy.html chain manager for WindSupply Bob pre-qualified. www.dti.gov.uk/renewables

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