Siemens and the offshore wind bonanza: How can the Humber keep the jobs and wealth

Politicians are not noted for understatement but, in the case of the huge wave of investment on its way to Hull and the Humber, local MPs have played the prospects down.

So says one of them, the West Hull and Hessle MP Alan Johnson, as he puts into perspective how significant the burgeoning renewables sector will be for a city that has lacked a core industry since its fishing fleet was decommissioned after the 1970s Cod Wars.

Hull’s elected representatives have been cautious in celebrating the decision by German giant Siemens to locate a factory manufacturing offshore wind turbines on Hull’s dockside. The caution is understandable. As Mr Johnson says, the city has seen many false economic dawns, but he is in no doubt that this is the real deal. “For once the politicians are underplaying this. It’s astounding what it will do for this area”, says the MP, who compares the impact as “like oil to Aberdeen”.

The Siemens facility will bring 700 new jobs. Many thousands more will come in the supply chain and from other green energy investments along the Humber estuary.

Why the Humber? The key is location. It is just 12 hours “steaming time” from three huge North Sea wind farms where 5,000 turbines will be erected in what has been described as the biggest civil engineering project in the world. It will be a game-changer for an area with high levels of unemployment and reeling from the likely loss of 850 skilled manufacturing jobs at BAE Systems in Brough.

But, while the Humber bids to become the UK’s renewable energy capital, there is a challenge to ensure the resulting jobs and wealth stay in the region. Offshore wind energy is in its infancy in the UK. On the continent there are established supply chains keen to profit as the industry develops in Britain, as companies heard at a conference, Offshore Wind: A Guide for Businesses, staged by industry body the Renewables Network and specialist PR and marketing company Footprint Renewables.

Some local businesses have already grabbed a slice of the action, notably MMS, based in Hull, which will build and operate a fleet of vessels to transfer technicians and equipment to the turbine fields. Others need to get up to speed - and fast.

Renewables Network Business Development Director Sam Pick says Siemens will be “the magnet that drags the rest of the industry on” and says local firms need to find their place in the supply chain. “Think about who you are going to send your invoice to - that’s where you target your products and services”, he urges.

Mr Pick says the big reward for the region is long-term careers, not just jobs. “People can get into these careers and grow with the industry”.

Another speaker, Eric Collis, of the Humberside Engineering Training Association (HETA), said a rapidly-evolving industry required a workforce who could learn and relearn skills. They’ll be well paid, though. He quoted £52,000 as the going rate salary for a technician working offshore.

He also predicted fierce competition for contracts. “It will be like the Klondike. Competition will come in like seagulls,” said Mr Collis. “You’re no longer competing with the guy around the corner. You’re competing with the rest of the world and they’re hungry for the work too”.

Capacity to grow and access to funding were vital, said John Britton of Hull-based consultancy BCG Bridgepoint. He said the UK offshore wind industry would be four times bigger in 2016 than in 2010. By 2030 it is predicted to be eight times larger than in 2016. Tracking that exponential growth would see a SME with turnover of £300,000 today become a £10m business, he explained.

Rob Bell, of skills and logistics consultancy Archomai, highlighted a key difference from the Aberdeen experience: “North Sea oil made money; North Sea wind costs money”. The industry’s subsidies meant pressure to reduce supply chain costs by 30 per cent to ease the taxpayer burden. “We’ve got to understand that this is not shopping at Harrods, it’s shopping at Lidl”, he cautioned. Suppliers would profit by driving down the industry’s costs, he said.

Logistics and supply chain expert Professor Chee Wong, from the University of Hull, said another challenge was compliance with a host of accreditations demanded by the likes of Siemens. The university is one of many organisations focused on developing a local skilled workforce equipped for the new opportunities.

Humber firms will also need to find and forge alliances or joint ventures, such as the British and Danish ownership of Alpha Energy, a company based in Hull supplying contract workers to the onshore and offshore wind industries. “You’ve got to put the air miles in”, says Director Bruce Marbrow.

And now is the time to act, says Mr Pick. He’s tired of hearing talk of “if” offshore wind will take off. “It’s not an if,” he says. “We need to be moving right now. This may be new here, but not in Denmark and Germany and companies here will be competing with existing suppliers there.”

• This article was first published in the Yorkshire Post