Siemens steps in to save Clyde windfarm

CLYDE, SCOTLAND - Siemens Energy AG has stepped in to secure the future of the 350-megawatt MW Clyde onshore windfarm in Scotland, following the collapse of wind turbine manufacturing company Skykon Campbeltown.

Skykon Campbeltown, part of the Danish manufacturer Skykon, went into administration last week with the loss of 130 jobs. The collapse raised questions over the future of the unfinished Clyde windfarm project, the largest onshore windfarm project in Europe. It is owned by Scottish and Southern Energy plc SSE.

In October 2009, SSE signed a deal worth an estimated 350 million euros US $449 million with Siemens Energy for the supply of wind turbines to the Clyde windfarm, which is in South Lanarkshire, 70 kilometres south of Glasgow. Those turbines were being manufactured by Skycon Campbeltown, the only large turbine manufacturer left in Scotland, at the former Vestas manufacturing facility.

Administrators Ernst & Young have now announced that a deal has been struck with Siemens Energy, which will see the 130 workers return on a short-term contract to finish the outstanding 30 turbines, each of 2.3 MW, needed for the Clyde windfarm.

"We were mindful of the uncertainty facing staff at the Campbeltown facility, and are therefore pleased to have concluded this arrangement in such a short timescale," joint administrator Andrew Davison said. "We are encouraged by this latest development, though the desirable outcome remains the successful sale of the facility. We look forward to working closely with Siemens in fulfilling the order."

Danish parent company Skykon filed for bankruptcy last October, citing a slowdown in the wind sector. CEO Jens Pedersen said: "The wind turbine industry is project-based and very cyclical, and it is currently being affected by a number of negative factors in the wake of the financial crisis. These effects have also impacted Skykon to the effect that we are in a very cash-strapped situation."

The collapse of Skykon comes at an awkward time for the UK government, which is currently spending tens of millions of euros to attract large turbine manufacturing companies to the UK to cash in on its massive offshore windfarm strategy. Last October, the government confirmed plans to spend £60 million US $95 million to develop the country's ports to allow for rapid deployment of offshore wind projects.

The UK has emerged as the leading European country for offshore wind turbine manufacturing, with Siemens AG, General Electric and renewable energy company Gamesa Corporation S.A. all having confirmed plans to build turbine-manufacturing plants in the UK.