Vestas blames UK planning bottlenecks for loss of 600 wind industry jobs

Wind turbine manufacturer Vestas announced yesterday that it is to close its Isle of Wight production plant and axe half its UK workforce as a direct result of the planning delays that have dogged many UK wind farm projects.

The news, which will mean the loss of 600 jobs, came just a week after chancellor Alistair Darling announced an additional £525m would be pumped into the offshore wind industry over the next three years. Prime minister Gordon Brown praised the Budget as "the greenest ever".

Vestas said in an interim financial report that progress in the UK planning system is so slow that despite the extra government money it will still be able to meet demand for turbines through imports and will no longer need its Isle of Wight blade production facility.

"If the expected lay-offs are carried out, Vestas will still have substantial excess capacity in Northern Europe compared with the current, local market prospects for the coming years," the report says.

Vestas said that a research and development facility on the island would be unaffected by the cuts, but a spokesman for the company said the plant itself was unlikely to open again in the next few years. "All of a sudden British MPs have decided to spend some money on renewable energy but I'm afraid I don't think that will be a game-changer for the Isle of Wight factory," he said.

Vestas chief executive Ditlev Engel told the Financial Times that the cuts were a direct result of the weakening pound and planning bottlenecks for onshore wind projects. "There are two sets of politicians, Whitehall politicians and local politicians," he said, arguing that attempts by ministers to fast track approval for wind farms were being undermined by opposition from local councils.

The government has been working to streamline the approval process for onshore wind projects, but under changes set out in the recent Planning Bill it can only intervene in local planning committees to grant decisions on projects that deliver more than 50MW capacity.

There are only two such projects planned in the UK at the moment, and the vast majority of smaller projects continue to be hampered by planning delays.

According to British Wind Energy Association (BWEA) figures, onshore wind farms face an average wait of 12 months to receive a planning decision from local councils, far longer than the wait imposed on other capital projects of a similar scale.

The move will come as a major blow to the UK wind energy industry, which has seen confidence bolstered by the injection of funding for offshore projects. The BWEA said that there was now considerable optimism that four planned offshore wind farms, including the world's largest project in the Thames Estuary, will now proceed as a result of the budget announcement. However, concerns remain that planning delays and difficulty accessing credit will lead to a slowdown in onshore wind projects.

There was better news for the global wind market, after Vestas reported that globally turbine production was up 21 per cent year on year during the first quarter, while profits rose 70 per cent to €56m (£50m).

And in related news the American Wind Energy Association (AWEA) released its first quarterly report yesterday, showing that more than 2,800MW of new generating capacity was installed during the first three months of the year, increasing total US wind energy capacity by over 10 per cent.

"These brand new wind projects shine a ray of hope on our economy today, creating good jobs and powering homes with a clean, inexhaustible source of energy," said AWEA chief executive Denise Bode.