Local suppliers the safest bet for renewable energy

By PETER RANSCOMBE
Published on 27/01/2013 00:00

INTERTEK, the FTSE 100 consultancy firm that Scottish Enterprise chief executive Lena Wilson joined last year, has called on renewable energy developers to use local companies in their supply chains in order to attract investment.

James Hunt, head of offshore consultancy, will tell a conference in Aberdeen this week that capital providers like banks and fund managers tend to be more generous with their finance terms if local suppliers are being used.

Hunt said funders believe using local suppliers will help to “de-risk” a project.

“Local companies know the weather and water conditions and investors look at those factors,” Hunt explained. “But firms will still need to have experience of working in the specific offshore wind sector in order to reassure investors.”

The supply chain for the offshore wind industry could be worth up to £120 billion, ­according to the UK Energy Research Centre.

Moving from sectors such as oil and gas into renewables represents a “chicken-and-the-egg” conundrum for many companies, which need renewables experience before being awarded contracts.

Hunt said businesses could win work by bringing in staff with the relevant experience from abroad, with many Britons already acting as consultants to the offshore wind sector in other countries.

“Bringing in the right vessels and then the right staff to operate those vessels is what offshore installation companies for example should look at,” Hunt added.

“Putting up a single wind turbine is easier than installing an entire oil rig but when you’re talking about 150 turbines then it’s not so easy.”

Trade body ScottishRenewable’s offshore wind and supply chain conference in Aberdeen this week will be the largest event of its kind staged north of the Border.

Lindsay Leask, senior policy manager at Scottish Renewables, said: “It is an interesting idea that this approach to development should make offshore wind projects financially more attractive to investors.”