French focus on Channel wind share

If France succeeds in its €10 billion bid to create a national offshore wind sector and supply chain, how will the UK fare in the Channel and North Sea market? Simon Jones reports.

An EDF/Dong consortium won three of the tenders awarded by the French government last month in its €10 billion bid to create a national offshore wind sector. A group led by Iberdrola and Eole-RES secured the fourth (and biggest) contract for a 500MW windfarm off the Brittany coast at St Brieuc.

France aims to install 6GW of offshore wind capacity by 2020, supported by a local industrial base and supply chain targeting the entire English Channel and North Sea – today the world’s biggest ­offshore wind market.

The St Brieuc project is “a milestone in the creation of a permanent offshore industry for France”, says Keith Anderson, director of Iberdrola’s offshore division. Areva will develop two plants at Le Havre to manufacture turbines and blades. In total, the planning, construction and operational phases will generate more than 2,000 jobs, mostly based in northwestern France.

Areva insisted throughout the nine-month tender process that it would only commit to this investment if it won at least two of the four tenders – covering an initial 1,925MW capacity to be operational by 2018. But Louis-Francois Durret, Areva director of renew­ables, has confirmed that both Le Havre factories will be built despite the three other contracts going to EDF/Dong. “This is the most important field, the only one with three candidates,” says Durret.

Building an alliance

Equally important for the French nuclear plant specialist is the chance to build an alliance with Iberdrola and Eole-RES as it seeks to expand into renewables. Areva recently won a tender for 120 turbines in the German market, but its focus is on the Channel. “Our agreements with them for France give us serious guarantees to participate in their projects in the UK,” says Areva president Luc Oursel.

Iberdrola is the global leader in renewable energy, with an offshore wind project pipeline of more than 12,500MW. It has won contracts for 9,500MW of capacity in the Channel and North Sea, including 7,200MW in the East Anglian field. “30,000MW will be installed here by 2020-25,” says Durret, confirming that the Le Havre base is part of an industrial strategy based on this huge market.

“Beyond the two plants [with 700 posts] to manufacture the blades and turbines, we also have commitments that other key suppliers will be based in Le Havre; add in outsourcing some components locally and it’s a skill-base of 1,000 people that we are creating.”

Areva also allied with GDF Suez for a fifth offshore tender at Le Treport. Paris has postponed a decision on that until the autumn.

French energy regulator CRE argued the fledgling wind sector would best be served by awarding EDF all four remaining tenders.

But Eole-RES chief executive Jean-Marc Armitano argues: “The CRE used its own criteria, but the value of our project is related to the sustainability of jobs, which in turn is closely linked to our ability to open export markets.”

The government rejected CRE advice, partly on fears of a fallout from president Sarkozy’s close ties with leading EDF figures – the deals were announced in the closing stages of France’s presidential election.

From France to the UK?

Alstom will develop four new plants in St Nazaire and Cherbourg to build up to 240 turbines for the three EDF-led farms off the Atlantic and Channel coasts. Production is due to start in 2014. A specialist R&D and engineering centre will also be set up in the Pays de la Loire region. Alstom offshore wind vice-president Frederic Hendrick has already said success in France will spearhead a drive into the UK market.

French industry and energy minister Eric Besson has backed the creation of a Channel-based industrial supply chain. “This decision will help create a new, world-class industrial sector with 10,000 new manufacturing jobs, and win France a leading role in the international offshore wind industry,” he says. Bidders such as Siemens, which would not commit to France-based production, stood no chance.

The French project is an obvious threat to the UK wind industry, which has already been hit by uncertainty over future subsidies. At present, less than one-third of the supply chain by value for UK offshore windfarms is sourced in the UK.

In February, a lobby of UK wind interests urged the government to back its campaign to source half of the supply chain at home. Even this appeal had no target date and few concrete proposals.

Simon Jones

This article first appeared in Utility Week’s print edition of 4 May 2012.

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