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Yorkshire business wins £1.2m grant, but offshore wind concerns remain

A Yorkshire-based gear engineering and manufacturing company has been awarded £1.2m from a government scheme to support offshore wind technology.

David Brown Gear Systems is working on a new 7MW offshore wind turbine gearbox.

It is the first company to be awarded funding under DECC and the Technology Strategy Board’s Offshore Wind Component Technologies Innovation scheme which is worth around £5m.

Energy minister Greg Barker said: “The coalition is determined to drive ambitious green growth and this is putting our money where our mouth is. This cash shows we are really shifting gear  when it comes to supporting innovation and offshore wind. 

“Making wind turbines more efficient is common sense and will help bring down the costs making them more attractive to build and helping us increase the amount of electricity we get from clean, green sources.”

The move comes after heads of some of the world’s biggest wind companies told the Guardian they are ‘reviewing their investments’ or ‘seeking clarification and reassurances from ministers on future energy policy’.

Companies including Vestas, General Electric and Siemens expressed concerns over the current climate, weeks after Tory MPs demanded cuts to wind power subsidies in a letter to the Prime Minister.

DECC has also released a report on offshore wind power under the Technology Innovation Needs Assessment which states the UK could become one of the leaders in a global offshore wind market, with a 5-10 per cent share of a market with potential cumulative gross value-added of between £200 - 1,000bn by 2050.

It states: “If the UK successfully competes in a global market to achieve the market share above, then the offshore wind industry could contribute £7 - 35bn to UK GDP up to 2050 (cumulative).”

Among the barriers to developing novel/innovative concepts highlighted by the report is barriers to entry, risk aversion, long lead times.

These include:

High barriers to new entrants - need a track record of operating hours but investment is high to get to this point without an order book

Construction and operating risks can have a catastrophic impact on Internal Rate of Return, so developers are unlikely to add additional risks to the project

Product lead times are very long (5-10 years) (i.e. negative externalities)

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