German engineering firm Siemens has announced that it will be freezing plans to export wind turbine parts from the UK following the announcement of the vote to leave the European Union.
The plans involved exporting wind turbine blades from a major manufacturing plant in Hull to Europe and the rest of the world.
The blade factory in Hull is one of Siemens factories that the company agreed to invest £160 million in back in November last year in order to facilitate the expansion of its offshore wind production.
Siemens have assured that they have no plans to halt activity at the site, nor do they intend to change their decision to employ 1,000 workers there. The plant will continue to manufacture parts for the time being and all workers will keep their jobs for the time being.
However, the company’s UK chairman Juergen Maier said, the plans to export turbine parts are being temporarily stalled until the nature of the UK’s future relationship with the EU, including details of export tariffs, become clearer.
Maier said: “Those plans were only beginning to happen and I expect that they will stall until we can work out exactly what the plan is, how we can participate in EU research programmes, and until all the issues around tariffs and trade have been sorted out.”
How long this will take is unclear, although Maier did say that the company would not be sitting on its hands until Article 50 (an article in the Lisbon treaty formally detailing exit procedures) is triggered.
He said: “We definitely can’t wait until Article 50 has been triggered. People will be holding off on major investment decisions and this is why we need to get together as soon as possible and see that a plan is put in place.”
Siemens backed up Maier’s views in an emailed statement, warning that the current climate of uncertainty is likely to affect investment in industry generally, and that clarity is needed as soon as possible. The statement said: “The government must now move swiftly to unify and agree the nature of the U.K.’s relationship with the EU and other trading partners, creating clear roadmaps to encourage future investment.”
Siemen’s project in Hull, where votes to leave the EU firmly outweighed votes to stay, did receive EU funding and backing. While the value of the funding and nature of the support has not been revealed, £525 million worth of backing has been provided for a wind farm in Scotland that will be built using parts made at the Hull factory.
Siemens recently completed two deals designed to improve its wind turbine manufacturing. One was a contract with Belgian consortium Rentel “for the supply and the 17-year servicing and maintenance of 42 7MW offshore wind turbines. Rentel managed to secure a loan from the European Investment Bank worth €250 million for the project.
More recently, Siemens bought out a majority stake in Spanish renewables company Gamesa, jointly creating the world’s largest wind farm manufacturer by market share, overtaking Danish firm Vestas.
