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Monday 12 July 2010

Renewable energy firm's Chinese deal could mean growth and jobs

A Scottish renewable energy firm that was recently put up for sale has agreed to work with a Chinese shipbuilding giant to develop products that it believes could help to transform the economics of offshore wind power.

Aberdeen-based SeaEnergy Renewables has signed a cooperation agreement with Nantong COSCO Ship Steel Structure Company (NCSC) under which the firms will develop and manufacture steel structures for use in the industry.

These will include the huge jackets that are used to support offshore turbines.

The partners hope that by combining SeaEnergy Renewables’ expertise in windfarm development with NCSC’s low cost manufacturing capacity they will be able to produce parts for a fraction of the current cost and at much greater speed.

Joel Staadecker, chief executive of SeaEnergy Renewables, said by standardising the production of components like jackets they could help address a key challenge facing developers of windfarms. These currently have to get components manufactured in small quantities for individual windfarms.

Staadecker said the partners hoped that they would be able to win a significant share of a global market that could be set for dramatic growth.

Between 6000 and 9000 structures are expected to be installed in UK waters alone over the next 10 years.

This means there would be plenty of work to keep newcomers busy, along with existing players like Fife-based Burntisland Fabrications.

If the venture is successful it could generate a significant number of jobs in Scotland. While plans have still to be finalised, the partners expect components will be made in China and then shipped to Scotland for assembly and dispatch offshore.

With offshore renewables expected to become an important source of power in other European countries, and in places like the USA and China, there could be huge amounts of business to be won overseas.

SeaEnergy Renewables, a subsidiary of SeaEnergy plc, knows all too well how costly it can be to develop windfarms.

Led by executives who developed the pioneering Beatrice windfarm in the UK North Sea, the firm has interests in projects to develop schemes on three sites off Scotland. It was put up for sale last month by SeaEnergy, formerly called Ramco, after institutions snubbed efforts to raise funding for it.

SeaEnergy’s chairman, Steve Remp, said at the time: “This is a business that needs deep pockets and we hoped we could stay with it...but we’ve tested the market and institutional investors are just not ready for it.”

News of the agreement with COSCO could increase interest in SeaEnergy Renewables, which may interest a utility.

Shares in AIM-listed SeaEnergy plc rose 26% from a low base, up 4.75p, to 23.25p.

Staadecker said he expected that SeaEnergy Renewables would continue to be based in Aberdeen after it is sold.

The agreement with COSCO was signed in Shanghai in the presence of First Minister Alex Salmond, who said an official trade mission to China would help bring £100 million business to Scotland.

Source: HeraldScotland.com

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