Mitsubishi Power Systems Europe (MPSE) is investing £100m in offshore wind turbine research in Britain and will create up to 200 jobs by 2014.
The plan is one of several boosts to Britain's wind industry in recent weeks, raising hopes that the UK manufacturing sector will cash in on the rapid expansion needed to meet green targets.
The MPSE research and development (R&D) programme is supported by £30m of government grants, from a £950m fund created to invest in industrial innovation, job creation and growth.
Although the plan is initially for research only, it puts Britain in a strong position to compete for future MPSE manufacturing investment, with the potential for another 1,500 jobs, according to the Government.
"The UK is now well placed to manufacture the turbines needed for the next generation of offshore wind farms," Lord Mandelson, the Business Secretary, said. "We will continue to work with Mitsubishi to secure production in the UK."
The Government is also putting £18.5m into the New and Renewable Energy Centre (Narec) in Blyth, for the development and testing of extra-large offshore turbines.
Britain already has the most offshore wind power generation of any country in the world. Only 1 per cent of global installed wind capacity is out at sea, because of the technical difficulties of building turbines that can withstand such harsh conditions. But half of it is in the UK. And the market is set to explode over the coming decade as Britain races to meet EU targets for carbon emissions.
The opportunity for UK business is huge. At the moment the UK has a total of 600 megawatts (MW) of wind capacity, and the industry supports about 5,000 jobs. To meet the 2020 targets, Britain will need to source upward of 40 per cent of all electricity from renewables, more than three-quarters of which will have to come from wind. That means between 30,000 and 40,000 MW of wind power, which the industry estimates will cost in excess of £100bn and create more than 70,000 jobs.
The question is whether the majority of the investment and the new jobs will benefit the British economy. UK industry missed the early days of the onshore wind industry and the mature supply chain is now dominated by Germany and Scandinavia. But in the offshore wind, the market is wide open.
"It is not exaggerating to say we are talking about the rebirth of Britain's manufacturing base," Maria McCaffery, the chief executive of the British Wind Energy Association, said. "Right now there is no established, mature offshore wind supply chain anywhere, and we want it to be here in the UK."
There has been considerable progress in recent weeks. Yesterday's announcements from MPSE and Narec came hot on the heels of a commitment from Clipper Windpower to build a factory in Newcastle to develop and assemble the giant blades needed for the group's "Britannia Project", a 10 megawatt turbine prototype with blades 72 metres long and weighing more than 30 tonnes. And last month the engineering group Mabey Bridge announced plans for a £40m turbine tower factory in Chepstow.
Ed Miliband, the Energy Secretary, said: "The UK is starting to turn its leadership in offshore wind generation into leadership in manufacturing. We have the wind resource and we now have an industry that is really starting to grow. It is another step to turning Britain into a leading green manufacturing centre."
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