The Brutal Business Reality Behind Wind Power

The+2009+Vestas+sit+in+protestPhoto: Darren+Gange

Almost exactly a year ago, the Isle of Wight was on people’s minds. The reasons were quite controversial. As protest signs and demonstrations brought attention to the loss of 425 jobs at Vesta’s Blades UK (to be outsourced to not cheap third world labour but the United States), the country’s economic and environmental heads were itching at why this was happening at all. The news made its way to the New York Times and most of the UK’s national papers, but while many of them concentrated on the local effect of unemployment, no one noticed just how beautifully strategic and well-timed this withdrawal may have been. Or how long it could have been in the planning.

Vesta’s Wind Systems is considered the worlds big hitter when it comes to wind power. Over the last forty years, they have installed nearly 35,000 turbines and wind systems around the globe. They are the largest producer of wind turbines on the planet and have factories and projects from China, across Europe and throughout the USA. The company has a market share of a little more than one third, at around 35% and in 2008, its annual net income rose to $662 million from $377 million, while revenue increased by 24% to $7.8 billion from $6.3 billion.

A+vestas+wind+turbinePhoto: Devagh

In Vesta’s interim financial report released in August 2008, they stated that the UK governments recently announced plan to meet its EU renewable energy target meant the company would invest in not only a new research centre but by 2010, would begin production of a new type of turbine blade at their Isle of Wight site. The new blades would be intended for the opening of the British market, as opposed to the American one where the majority of blades produced at the factory were, in recent years, exported. Vesta’s expected to raise employment to 1,500 in the UK in 2010, and said that 64% of its income came from European orders up to the end of June 2008.

 

Yet by the end of April 2009, the company was already engaged in talks to cease production at the factory. Stating that due to the current unfavourable market conditions caused by the credit crunch, weak currencies and lacking political support at a local level had meant that the factory had become, from an environmental and economical perspective, not cost effective.

Vesta’s UK had been struggling with local public support and combined with the promises of politicians to implement wind energy projects that never materialised meant that the factory may have been becoming a fifth wheel. However, the unemployment faced by workers who had actually trained their American counterparts to do, as it turned out, their own jobs, was a sure blow for the local people. The news was met with strong resistance and in July, some of its workers forced their way into offices and began an internationally publicized 19 day sit-in. The fight to save their jobs was repaid by their company with a pizza, delivered with literature terminating their employment.

The+sit+inPhoto: anonymous

What many people don’t know is that running concurrently alongside this story was another, much less publicized one. For two and a half years, Vesta’s Blades UK had been being very thoroughly investigated by the Health and Safety Executive in connection with an offence first recorded in September 2004. The process of building these green machines is not without its risks. It involves the use of highly toxic epoxy resins that are extremely hazardous to health. Over the period of between 2005 and 2007, 13 employees had developed the symptoms associated with occupational dermatitis.

The island company reacted to this information by increasing production by 50%, changing a two-shifts-per-day cycle to a three-per-day one. Since the end of that investigatory period, the court date had been repeatedly postponed. The hearing finally took place on June 16th 2009, right in the middle of local uproar in relation to the closure. At the hearing, the HSE investigators stated: “Employees suffered as a result of being allowed to use protective equipment wrongly and having safety glasses that did not protect all the face, through processing methods that did not minimise risk and through inadequate risk assessment. The company was aware but failed to act properly on the reports of ill-health.”

The+vestas+factory+during+the+protestPhoto: Darren+Gange

Vesta’s Blades UK pleaded guilty to both counts of breaching the ‘Control of Substances Hazardous to Health Regs 2002 (No 6) para 1’ the HSE brought against them. The company claimed to have spent in excess of £400,000 in trying to prevent contamination. Their attempt to mitigate the consequences of their responsibility were ignored by the court who awarded the maximum fines they could give and instructed Vesta’s Blades UK to pay the entirety of the HSE investigation cost. Should the company not have then closed down, any subsequent cases of occupational dermatitis would have resulted in the HSE enforcing production to stop, and a much more serious and highly damaging legal action being taken against them. For any company the threat of such a health and safety issue is substantial.

A+turbine+in+the+north+of+EnglandPhoto: Sharon+Loxton

What does this all mean? At the very least, it should change our perspective of an industry which adheres itself to environmental motivation. It would be nice to think that the business of renewable energy is governed by a different set of rules – those not solely concerned with economic growth and profit. It appears that in order to stay at the top of their game, big green industries may be no more ethical than their consumer-driven contemporaries.

The closing of the Isle of Wight factory could very well have been a simple case of cost-effective, future-confirming business strategy. Only time can prove the intelligence of their business plan, but it will forever hold a few nasty truths within it too. I for one find the idea of such an imperative technology being in the hands of the kind of irresponsible and self-serving people we have come to expect from big business, completely counterproductive. In the future, the nationalisation of renewable energy may become the only way to safely secure its credibility. Lest it be perverted into a familiar case of non-sustainable supply and creatively marketed demand.

Sources: 1, 2, 3, 4, 5, 6

Additional sources:
Vestas Wind Systems A/S: 28 July 2009, Press Release No. 5/2009
Vestas Wind Systems A/S: Randers, 15 August 2008, Interim financial report, second quarter 2008
Vestas Wind Systems A/S: Non financial statement

 

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