Able Group’s executive chairman has told how the company remains committed to developing a dedicated green energy port on the Humber, despite losing one of two major manufacturers it had lined up.
SeAH, the South Korean monopile producer, has switched plans for a plant - and 750 jobs - to Teesside, having revealed its intentions for Able Marine Energy Park back in September 2020.
It is understood the pace of development is a key reason, with greater support from the public purse to enable it also highlighted. Both are new freeport sites.
Read more: Orsted welcomes step change to accelerate UK offshore wind development
A disappointed Peter Stephenson, ironically based in the North East, has told how it will “inevitably delay the start of the project” - which had been anticipated for later this spring.
The passionate entrepreneur, who has had to endure a historic legal battle with Humber port operator ABP to finally land consent for a site he’d pieced together over several years, said: “The AMEP project needs to secure commitment from other key manufacturers. They, in turn, need to secure their own initial orders to justify their investment. Their immediate opportunity was within the soon-to-be-completed Contract for Differences allocation Round four process for 7GW of new installed offshore wind capacity.
“However, as things stand Siemens Gamesa – who supply blades from an existing UK facility, Hull - have had unprecedented success in this round, and at the significant expense of their competitors seeking to establish facilities at AMEP.
“Indirectly this has created a specific problem for SeAH, who have secured an order and need to start constructing their facilities in Q2 2022. However, we cannot commit to quay construction until we have a minimum of two key manufacturers to provide guaranteed income streams to support project viability.”
Spanish tower builder GRI Renewable Industries is the remaining business lined up for the North Killingholme site, though a latest update from Madrid was not immediately available following the news.
Revealed in August, the company intends to create 300 jobs as it adds to the capacity it has globally. It builds 2,000 towers a year for onshore and offshore deployment with plants in Spain, Brazil, US, Turkey, India, South Africa and Argentina. It has supplied towers to continental North Sea sites in Germany and Holland.
Chairman and chief executive of GRI, Jon Riberas previously described it as a project that “will create a worldwide leader in the offshore sector in a market that is increasingly demanding and constantly evolving”.
GE is another name that has abounded - a direct rival to Siemens Gamesa on turbine manufacturing. Another is Vestas.
Mr Stephenson said: “Looking to the future, especially given that only recently the CfD auction was confirmed to become an annualised process, both ourselves and our prospective occupiers should be ideally placed to capitalise on imminent future opportunities. “This welcome development, in turn, should provide the level of activity to enable progress. The offshore wind sector as a whole is accustomed to the cyclical nature of turbine demand which is primarily governed by the power output of a particular product at a particular time.
“Our greatest concern, however, is that we also now find ourselves having to compete with what, in reality, is a taxpayer funded development on the Tees. Whilst recognising that AMEP has been offered grant support from Government, the reality is that this pales into insignificance compared to the levels of subsidy with which we now have to compete against.
“There is no escaping the fact that whilst AMEP is, by any measure – not least through its scale, design and location – the best product on offer, it is an expensive and complex development.
“Nonetheless, and as frustrating as the decision by SeAH may be, our collective resolve is not diminished. Whilst inevitably the project will be delayed – through ongoing collaboration with both Government and the offshore wind sector we will leave no stone unturned in seeking to deliver a world class and world scale project.”
The announcement, on Valentine’s Day, was made with a Love Hearts picture opportunity featuring Tees Valley mayor Ben Houchen and Redcar MP Jacob Young, while on the Humber, it left a bitter taste for a fellow Conservative backbencher.
Able Marine Energy Park sits in the constituency of Cleethorpes MP Martin Vickers. He said: “Clearly it's a matter of regret and my concern is that it may further delay development of the marine energy park. I am working with colleagues at North Lincolnshire Council to get reassurance from Able about the future.”
A £75 million commitment has been made to AMEP by the government, with Business Secretary Kwasi Kwarteng talking up the deal when it appeared to have been firmed up last July - as he did the order win with Orsted which came in September.
He’d told Business Live how he had been speaking to SeAH for a year prior, telling how they had a “great belief in the people and the talent in the Humber region” as he expressed his delight that “they have made this commitment to the Humber”.
On the switch, SeAH Steel Holdings chief executive and president, Joosung Lee, said: “When SeAH confirmed its UK investment, the aim was to contribute to the UK offshore wind industry by working with the UK Government.
“We are pleased to take the first yet significant step for this goal in Teesside. We will endeavour to make our factory globally competitive as well as become a good member of the community.”
Orsted responds to SeAH switch
SeAH appeared to be full steam ahead for the Humber, with Orsted pledging first orders months after government backing for the project emerged last summer.
With GRI Renewables in place too, the 'big space in the right place' looked finally set to be realised after 12 at times torturous years of consenting and appeals.
Following the relocation of the huge investment and 750 jobs, a spokesperson for Ørsted, said: “We are in discussion with SeAH Wind Limited regarding the relocation of their planned UK facility to Teesside but those discussions are commercially confidential.
“However we can confirm that the agreement with SeAH remains in place to be the first and lead customer for monopile foundations manufactured at the new facility, subject to securing a Contract for Difference and final investment decision for Hornsea Three offshore wind farm.
“This is an ambitious supply chain venture and clearly demonstrates the benefits of collaboration between government, ports and suppliers. The UK is a global leader in offshore wind, and the Humber region is a key part of this success story. We remain firmly committed to the region with over 400 people working from our East Coast Hub in Grimsby and will continue to work collaboratively in the Humber to support the development of the supply chain in the region.
“That SeAH has selected an alternative location for this factory is disappointing for the Humber, however securing this significant inward investment and new capacity development in the UK remains extremely positive news. SeAH’s investment represents another positive step towards creating a larger and sustainably competitive UK supply chain to support the next chapter in the UK’s offshore wind success story.
“The Hornsea Three team has worked extensively with SeAH Wind to support their investment decision to establish a new, globally competitive monopile foundations factory in the UK. We very much look forward to continuing our work with SeAH in bringing this landmark project to life and ultimately to deliver competitive monopiles from a UK fabrication facility for the first time.”
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