London (Platts)--19Nov2012/945 am EST/1445 GMT

France's Areva has signed a memorandum of understanding with the Scottish government to build a wind turbine manufacturing plant in eastern Scotland, the company said Monday.

Scottish first minister Alex Salmond signed the MOU Monday, according to a statement from Areva, as a step towards establishing an Areva wind turbine factory near the Firth of Forth to produce 5 MW wind turbines for UK offshore wind farms.

French state-controlled Areva said it has chosen to locate its future facility in eastern Scotland to optimize logistics costs for UK projects and to benefit from a growing cluster of offshore supply chain businesses in the area, including Samsung, Gamesa and Mitsubishi.

"This demonstrates the group's commitment to contribute to the development of an ambitious offshore wind industry in the UK," Areva CEO Luc Oursel said in the statement.

Article continues below...

Request a free trial of: Power in Europe
	Power in Europe is an indispensable resource for power executives who need critical information delivered in a clear, concise and accurate manner. It provides the insights you need for effective strategic planning, forecasting and intelligent decision making.

"The Scottish site will complete our industrial plan to supply European offshore wind projects and will strongly position us to grasp opportunities in the extensive UK market."

UK prime minister David Cameron called the development "brilliant news" for Scotland and highlighted the importance of the renewables sector for the UK economy in a statement following the signing.

"I am determined that Britain competes and thrives in the global race and this shows that the UK remains an attractive place for foreign investment. Growth of the renewable energy sector isn't just good for our environment, it's good for our economy too," Cameron said.

UK energy secretary Ed Davey said in the same statement that the Areva MOU could result in as many as 750 jobs and bring wider benefits to the Scottish region.

"Areva's announcement is the latest sign that the UK is set to reap the economic benefits of being at the forefront of low carbon energy," Davey added.

Renewables association RenewableUK said the move provides "tangible proof" of the growing importance of wind development to the UK's industrial base, and that with the right policy framework in place the sector will rapidly expand.

"Britain's offshore wind industry is on the threshold of delivering thousands of manufacturing jobs at a time when the country needs them most," RenewableUK CEO Maria McCaffery said in a statement following the MOU announcement.

"It's now time for the UK government to nail its colors to the mast and make sure these planned investments come to fruition. We need to put the recent political spats over energy policy behind us and focus on what we need most -- jobs, investment and securing a way of generating clean energy on an unprecedented scale."

Monday's MOU follows further details last week from Areva of its Le Havre supply hub, from which it is to supply 100 turbines to an Iberdrola-led offshore project at St-Brieuc, one of the first to be built in French waters.

Le Havre is a key French port area in northern France and Areva is building a factory to manufacture nacelles -- the housing unit for generator parts -- and a turbine blade factory, while also attracting its component suppliers to set up in the area.

Local partnerships are being established to provide wind power entirely produced in France, and Areva hopes to win more supply contracts in France's upcoming second tender round, it said.

Areva's main business is nuclear power but figures released in July showed its renewable energy division contributed positive operating cash flow for the first time in the first half of this year, highlighting the emerging importance of green energy to the group as it looks to improve its cash position and pursue cost-cutting measures.

Revenues from the Renewable Energies division increased four-fold on the year to Eur253 million ($322.5 million) on growth in offshore wind, solar and biomass sectors. The company targets full-year renewables revenues of Eur600 million.

--Robin Sayles, newsdesk@platts.com
--Jillian Ambrose, jillian_ambrose@platts.com
--Edited by Jonathan Fox, jonathan_fox@platts.com

Tweet