Updated: Mitsubishi announces £100m UK wind turbine project

The UK's wind energy industry received a major boost from a somewhat unexpected source this morning, after Mitsubishi Power Systems announced plans to invest up to £100m in a new wind turbine R&D project.

Speculation had been mounting that GE and Siemens were investigating locating a new turbine manufacturing plant in the UK, but they could yet be beaten to the punch by Mitsubishi which, under a new memorandum of understanding with the government, has agreed to create around 200 jobs through a new offshore wind turbine R&D project.

The government, which will provide a £30m grant to support the project, said that the move made the UK a "strong contender" to become a manufacturing base for Mitsubishi's wind turbine arm, potentially creating up to 1,500 jobs in the future.

"Mitsubishi's investment in wind turbine R&D and the creation of 200 highly skilled jobs is great news for our future plans in low carbon, high technology industries," said Business Secretary Lord Mandelson.

"The UK is now well placed to manufacture the turbines needed for the next generation of offshore wind farms. We will continue to work with Mitsubishi to secure production in the UK."

Mitsubishi said that the three phase project would focus on prototype assembly for the company's new 6MW second generation turbine, the development of offshore wind technologies at a new UK-based Wind Centre for Advanced Technology, and the development of new large wind turbine blades made from composite materials.

Senior executives at the company also signalled that, alongside the new research centre, Mitsubishi's Ship Building division is investigating entering the offshore wind turbine installation, operation and maintenance vessel market.

Industry insiders said that the latest deal is further evidence of growing confidence in the sector ahead of the new wave of so-called phase-three offshore wind projects.

The announcement comes on the same day as the Financial Times reported that Spanish wind turbine manufacturer Gamesa is considering locating a factory in the UK. One of its key potential customers, energy giant Iberdrola, is reported to have urged the firm to open a new plant in the UK, and the company confirmed it expected to make a decision in the coming months.

The past few weeks have seen similar moves from Clipper Windpower, which has confirmed plans for a blade plant in the North East, and Mabey Bridge, which is to build wind turbine towers at a factory in Wales.

Meanwhile, rumours continue to circulate that either GE or Siemens could announce the development of a major turbine manufacturing plant in the UK.

"We know that Siemens has had discussions at Number 10," said one industry watcher. "We are moving from a situation where people were very cautious, to one where they are much more enthusiastic, and what you are seeing now is the leading players jockeying for position behind the scenes. They realise that whoever moves first could really benefit in two or three years' time."

The announcement came on the same day as the government further bolstered the North East's status as a technology hub for offshore wind, announcing that it is to invest £18.5m in a new offshore wind test site off the coast near the New and Renewable Energy Centre (NAREC) in Blyth.

The facility, which was announced earlier this month, will feature 20 pre-consented 'pods' which developers will be able to lease in order to deploy prototype or demonstration turbines and foundations for testing. The pods will be aligned at depths of 15, 35, 45 and 55 metres, allowing firms to test a wide range of different technologies and foundations.

The project will provide a further boost to NAREC's status as one of the world's leading turbine test facilities, and comes just months after the centre announced plans for a new blade testing facility.

British Wind Energy Association chief executive Maria McCaffery said the recent flurry of investment in the UK's offshore wind sector underlined growing confidence across the industry.

"This all signals the rebirth of manufacturing in the UK with an estimated 70,000 green collar jobs to be created on the back of over £100bn of private sector investment," she said. "The combined contribution from both on- and offshore wind is set to contribute up to half of the UK’s domestic electricity requirement by 2020, dramatically reducing our dependency on imported fossil fuels and displacing millions of tonnes of harmful CO2 every year. It is not an exaggeration to speak of offshore wind as the "new North Sea oil"."