THE firm which kickstarted hopes of a wind turbine revolution in Tyneside has halted its offshore work.
Clipper Windpower hoped to create around 1,000 North East jobs by designing and building giant offshore wind turbines in the region.
Government grants would have underpinned the Britannia project for 10MW turbines which would have been tested at Blyth’s National Renewable Energy Centre and then manufactured on a custom-built site at the Neptune Yard on the banks of the River Tyne.
But the American parent company United Technologies has mothballed the project and handed funding back, as it looks to reconsider plans for the offshore turbines and focus instead on the production of smaller onshore models.
Clipper was picked by Crown Estates to lead the way in producing the thousands of turbines to be placed 100 miles out to sea at Dogger Bank.
Nearly £2m handed to Clipper to help with this aim has been handed back after the two sides agreed to terminate contracts.
A further £5m which had been set aside by development agency One North East to help the manufacturer was not accessed and is likely now to be returned to the Government rather than be held for further regional investments.
Clipper’s parent company in America is expected to send senior executives to Tyneside in the coming weeks to discuss options.
Peter Christman, president of Pratt & Whitney Power Systems, the subsidiary of United Technologies which owns Clipper, said: “We have not decided to move out of offshore wind but it is a question of timing and we did not want to hold up the Crown Estate.”
He said there were a number of factors in his decision, including an increase in the number of competitors, and the current turmoil in financial markets.
Last night Bruce Shepherd, from whose firm the factory land is leased, said he remained optimistic for the future of wind production.
“This is obviously something for Clipper to comment on, but we are happy to support Clipper’s parent company in the ambitions for the site. What is important to remember is that this site is included in the new enterprise zone and that offers a series of incentives which will entice more firms here.”
A spokesman for the Crown Estates said: “After a long and detailed discussion with UTC about the development of the Britannia project, the Crown Estate received notification from Clipper Windpower of its desire to terminate the Britannia project agreement.
“A termination agreement was subsequently concluded under which the Crown Estate’s entire £1.6m plus VAT investment has been returned to it by UTC.”
He added: “The Clipper project had an important role in stimulating the offshore wind turbine market in the UK, resulting in the development of the next generation of offshore wind turbines.
“The Crown Estate has no plans to invest in another offshore wind turbine prototype, and we are continuing to work with turbine manufacturers and UK ports to bring turbine suppliers to the UK.”
A One North East spokesman said: “To date, none of that funding has been drawn down by the company as it was linked to the eventual manufacture of the turbine blades on Tyneside.
“The investment was the culmination of two years’ collaboration between Clipper Windpower, One North East, Government and UK Trade and Investment to bring the project to the region and identify supply chain development.”
Enterprise zone can inject fresh energy into industrial plans
ADVOCATES of the North East wind energy sector have played down the threat to jobs prompted by Clippers’ decision.
Research centres and MPs have said the region still has a lot to offer, not least its enterprise zone status offering tax incentives to manufacturers wishing to bring jobs to Tyneside.
The Neptune Yard in which the Clipper factory is based is at the centre of a renewable energy enterprise zone which the Government insists will create 7,000 jobs.
Newcastle East MP Nick Brown said the region should not be alarmed by the news.
Mr Brown oversaw much of the inward investment coming to the sector during his three years as regional minister.
He said: "Clipper’s parent company UTC are a large company and it is not unreasonable for them to review the way forward on a long term project. It is capital intensive and depends upon a variety of factors.
"At the end of the day they have a 25-year lease on the premises, it is right for them to consider how best to take forward the site but it is clearly in the national interests that we do what we can to invest in the renewable energy sector."
His optimistic tone was backed by Narec, where officers at the research and testing centre have insisted the blow will not hold back their expansion plans.
Clipper was handed nearly £2m to test new turbine at the Blyth-based National Renewable Energy Centre. While this will not go ahead, Narec has said Clipper is just one of several companies using its facilities and that the test centre is booked out until spring next year.
A spokesman for Narec said the centre enjoys a good working relationship with Clipper "and several other major firms".
When Clipper announced its Britannia project in October 2007 some turbine manufacturing firms questioned the logic of putting so much Government backing behind an untried offshore technology.
In September last year the firm had to issue a trading statement expressing concern over its financial plight. Clipper was due to start production last November, but these plans have now been put on indefinite hold.
Top Tory says jobs agencies were valuable
A SENIOR Conservative has criticised the Government’s decision to scrap the regional development agency One North East.
Former deputy prime minister Michael Heseltine has spoken out against the coalition’s decision last year to scrap agencies which poured millions of pounds into the renewable energy sector and helped attract major firms such as Clipper to the region.
Lord Heseltine, who chairs the regional growth fund selection panel set up to reduce the impact of scrapping the agencies, has said Government departments are having to create locally-empowered bodies to fill the void left as a result of earlier decisions. Writing in a piece outlining the impact of inner-city riots, Lord Heseltine made the case for localism.
He added: "Greg Clark has been appointed Minister for the Cities and is addressing one of the Government’s mistakes – the disbanding of regional development agencies also broke up the regional teams that gave Whitehall an overview in a locality. Instead each government department has recreated its individual empire in the regions."
Newcastle Central MP Chi Onwurah said Lord Heseltine’s comments, together with the blow to the wind industry, showed why the region needed a dedicated advocate.
"What’s happened demonstrates yet again why we need a strong regional voice promoting investment and innovation in the North East," she said. "Heseltine today admitted that abolishing the RDAs was a mistake. When is the Government going to do something to rectify it?"
Ms Onwurah, a shadow business minister, added: "Supporting innovation in renewable energy should be a key part of any growth strategy. I hope the minister will explain how the £5m set aside for this investment will be used to support renewable energy in the North East, and not clawed back by central Government."
Earlier this year chairman of development agency One North East Paul Callaghan warned the Government efforts to create a wind sector in the region could be undermined by a lack of incentives on offer following the decision to scrap the agency.
He set out how investment which should have come to the region had headed to Scotland and Europe because they could offer more help to major firms.
Speaking to The Journal, he said: "We are not as home and dry in offshore manufacturing as I would like to be."