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Ministers have been forced to step in and rescue a wind turbine factory after collapsing demand for blades pushed it to near collapse.
Wind turbine maker Vestas on Wednesday said it would make 300 of its British staff redundant after demand for its products slumped.
At least half of the 600 staff at Vestas’ plant in Newport, Isle of Wight, will be cut amid shrinking demand.
It comes after energy giants, including BP and Shell, scaled back their wind energy plans, under pressure from investors to boost their financial results.
The Government said it had intervened to save the Vestas factory, which had been “almost certain to close”.
With taxpayer backing, the factory will switch from making offshore blades to smaller, onshore ones. One of Labour’s first acts in Government was to lift a de facto ban on onshore wind and Ed Miliband, the Energy Secretary, has committed to doubling onshore wind energy generation capacity by 2030.
Mr Miliband said: “My thoughts are with the staff at Vestas who are facing uncertainty about the future of their jobs, especially at this time of year.
“I am, however, pleased that we have reached this agreement in principle with the company to save 300 jobs on the site, and that our lifting of the ban on onshore wind farms is helping make a site earmarked for closure viable for the future.”
‘Significant investment’
Neither Vestas nor the Government were willing to disclose the financial details of the deal but the Government suggested it was part of the “most significant investment programme in homegrown British energy”.
Anders Nielsen, of Vestas, said: “We are pleased that this partnership in principle with the UK Government means we can continue manufacturing activities at the Isle of Wight to support the deployment of onshore wind in the UK.”
The Danish company’s rivals are also suffering. Earlier this year Ørsted announced 800 job losses and slashed its plans to scale up wind capacity. Loss-making Siemens Gamesa, which has been hit by quality control problems, has also suffered a decline in sales.
Vestas said its technology activities, which employ approximately 140 people on the Isle of Wight, will not be affected by the redundancies.
A consultation process involving 600 staff has begun, and employees will be told the result by January.
Vestas shares fell 2.5pc on Wednesday.