Belfastâ€™s Harland & Wolff shipyard is experiencing good busi9ness, this is where the Titanic and her sister ships were built. A century later it is the booming offshore wind-power industry that has taken centre stage.
â€œPeople know us as a shipbuilder and that accounted for almost 100pc of our business as recently as 2003. Now we are 75 per cent offshore-renewables based,â€ said David McVeigh, the firmâ€™s sales and marketing manager. â€œWeâ€™re working on our third offshore windfarm and on a tidal energy device. Itâ€™s very high-value, hi-tech, value-added work.â€
Harland & Wolff is one of many UK and international companies profiting from the dash to power the UK with wind- and marine-generated electricity, which is attracting significant inward investment.
The Spanish group Gamesa is set to built a wind-turbine factory in the Humber, Harwich or Tyneside as part of a Â£127m plan to base a global offshore wind business in the UK. Siemens has committed to building an offshore wind-turbine plant in Hull, which could ultimately create 10,000 jobs in the region. The global giants General Electric and Mitsubishi, meanwhile, are also looking for UK factory sites.
Figures from the renewable energy industry body RenewableUK suggest this investment is boosting employment. Full-time jobs in the sector grew by 91pc between 2007/8 and 2009/10, in contrast to overall UK employment, which shrank by 3.4pc in the same period. The potential in the coming decades is greater still. By 2050 offshore wind could be worth Â£65billion to the UK and could support 220,000 jobs.
The UK could develop a clear global lead in offshore wind, according to Benj Sykes, director of innovations at the Carbon Trust. â€œWith offshore wind thereâ€™s a new generation of technology thatâ€™s up for grabs. I donâ€™t believe the Danes, Germans or Norwegians have any de facto lead here.â€
While wind is the immediate prize, the UK is ideally placed to develop, commercialise and deploy a number of other new green technologies with global export potential, said Mr Sykes. â€œThe move to a low-carbon economy offers huge scope for developing new industries, goods and services. Marine energy, either tidal or wave, has the potential to employ a further 17,000 people and could enable us to capture a new global export market.â€
Energy efficiency drives, such as the Governmentâ€™s plans to â€œdecarboniseâ€ the nationâ€™s building stock, will create further new business and jobs. The UK is also leading the research and development effort in transportable power systems, such as fuel cells, that might one day drive the worldâ€™s cars, said Mr Sykes.
West Sussex-based Ceres Power is hoping to be just such a global winner. Its innovative and highly efficient combined heat and power units, which generate electricity, hot water and space heating for homes by converting natural gas using fuel-cell technology, have the potential to shave hundreds of pounds a year from household utility bills.
British Gas has ordered 37,000 units, Ceres is on the verge of going into large scale production and the potential market is vast, said the firmâ€™s chief executive officer, Peter Bance. â€œToday 1.5million boilers are replaced each year in the UK and we can attack most of that market.
â€œGoldman Sachs has said that the global market for this kind of product could be 30 million products a year. Beyond that we could exploit the technology in other sectors, for example for use in backup and auxiliary power units.â€
Although Ceres looks well placed to grow rapidly, its fight to commercialise its innovations is instructive for others developing novel energy-efficiency and renewables technologies. â€œWe hope to be the next Intel of the power world but getting to where we are has been a struggle,â€ said Mr Bance.
â€œThe cards are firmly stacked against you in this sector. The cost of capital is high and itâ€™s difficult to get suppliersâ€™ attention. The UK produces plenty of good inventions but itâ€™s rare to see them become successful here.â€ The problems are risk-averse British entrepreneurs and venture capitalists together with a lack of incentives, he said. â€œItâ€™s no accident that many of our biggest backers are from the US. The UK does not have an attractive set of policies for green innovators to grow and thrive here; things are much better in Germany, the United States and Asia.â€
The UK did well nurturing start-ups but was not doing enough to keep the successful green technology firms in the UK.
When Ceres expands its production it would almost certainly set up a factory outside the UK. Mr Sykes pointed out that the Government was planning to do more and said its Â£200million initiative to build technology and innovation centres, announced last month, should help start-ups survive. â€œThe concept is a powerful one where R&D is brought together with industry to help technology to be commercialised. It will be a powerful model if it works. We need one on low-carbon technologies and I think itâ€™s pretty likely to happen.â€
Mark Elborne, CEO & President of GE UK, which will manufacture wind turbines in the UK as part of the development of its offshore wind business, agrees that funding the innovators is important. â€œAt a time of economic difficulty and cuts in public spending, we also need to continue to ensure that we see good ideas and to support investment in them. Entrepreneurs and firms are ultimately key to delivering growth and the issue of access to capital needs to be addressed.â€
Better tax breaks for clean-tech investors, rather than direct government intervention, would help, said Ian Foley of Williams Hybrid Power. The company, a spin-off from its Formula One racing parent, is commercialising highly advanced flywheels developed for racing cars. Its technology could cut fuel use in cars, buses and other transport at a fraction of the cost of existing technologies such as hybrid electric vehicles.
â€œIâ€™m sceptical of the picking-winners approach. Why would government be any better at picking them? Winners will come out of a truly competitive environment and itâ€™s the job of venture capitalists to provide that starting point,â€ said Mr Foley.
While government cannot be expected to pick winners, judicious strategic public funding can have a place in helping emerging sectors, said Mr Sykes. â€œIt can help where market failure is preventing an industry from developing. Denmark is a good example, it has had massive success in wind because the Danish government supported those technologies at an early stage. It put a few billion in to get it started and the industry is worth a few billion dollars a year to them now.â€
Nurturing green innovators at this stage is vital for establishing a lead in the industries of the future, said Mr Sykes. â€œStart with innovation and you have the best chance of capturing that market. You donâ€™t wait until you can license someone elseâ€™s technology or you can be sure lower wage economies will come in and do it. You need to own the intellectual property. The know-how it gives you enables you to get a lead on others. Marine is a good example, the UKâ€™s understanding of how wave and tidal energy can be captured enables us to get ahead in deploying it, making it difficult for others to catch up.â€