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Wind energy rescues fading German shipyard

Mon, 05/03/2010 - 6:25am
Reuters

BERLIN (Reuters) - The illustrious history of Germany's century-old Nordseewerke shipyard was heading toward a final unhappy chapter when the global economic crisis throttled demand, dooming one of the region's biggest employers.

But rather than shutting the Emden shipyard that launched 559 vessels in 106 years into the North Sea -- everything from warships and submarines to post-war cruise ships like the "Love Boat" -- a more enlightened solution emerged: renewable energy.

The Nordseewerke yard will now play a crucial role in Germany's major push into offshore wind energy.

The vast facility in Germany's northwest corner is now being refitted in a 40 million euro ($53 million) makeover. It will build underwater foundations, tripods, platforms and towers for offshore wind turbines by workers who until now built ships.

Germany's ambitious renewable energy drive has turned many putative losers like the Emden region into improbable winners. Replacing fading industries with those having bright futures is a textbook example of the "creative destruction" of capitalism.

It is in any case certainly better than attempting to prop up dying industries with costly state subsidies.

"I think it's a fantastic solution for the shipyard and a great fit all round," said Claudia Kemfert, head of energy at Berlin's DIW research institute. "Offshore wind is just getting off the ground now and will be a boom industry for years while shipbuilding is past its heyday. There's too much capacity."

GERMANY WANTS GREATER SHARE

Germany is already a world leader in renewable energy, now deriving 16 percent of its electricity from renewable sources such as wind and photovoltaic. It is also the world's second-biggest wind power producer after the United States.

But Germany wants more -- to fight climate change, to create jobs and to grab an even greater slice of the global market for renewable energy technology. Offshore is a key growth area.

Winds blow more powerfully and consistently across open seas. Germany already has 21,000 wind turbines on land.

To back its aim of cutting greenhouse gas emissions by 40 percent from 1990 to 2020, the government pledged to raise the renewable energy share to 30 percent by 2020. Its robust legal framework guarantees investors handsome returns for decades.

Having seen some 300,000 renewable energy jobs created in Germany, all parties are rowing in the same direction to back renewable energy despite some complaints it is more expensive than fossil fuel-based sources. There are state-mandated incentives utilities must pay to producers of renewable energy.

Germany switched on its first offshore wind farm last week, Alpha Ventus. The 12 turbines rise 155 meters above the North Sea, 45 km (27 miles) north of Germany, and produce 60 megawatt hours of electricity per year -- enough for 50,000 households.

Another 29 offshore wind parks with nearly 1,600 more wind turbines have been approved and are in advanced planning stages.

In the United States a first offshore wind farm was approved last week. Interior Secretary Ken Salazar gave the green light for the 130-turbine, 420-megawatt Cape Wind project that could be built by 2012. Germany's Siemens will provide the turbines.

JOBS SAVED

In Emden, the 550,000-square meter Nordseewerke shipyard had survived the Great Depression, the Nazi era, World War Two, a temporary post-war ban on shipbuilding by the Allies and a crisis in the 1970s when labor costs sent many jobs to Asia.

The 2008 financial crisis proved to be its downfall.

But thanks to renewable energy, 720 of the yard's 1,200 jobs were saved when wind turbine maker SIAG Schaaf Industrie AG in March acquired Nordseewerke from shipbuilder ThyssenKrupp Marine Systems. SIAG plans to build 100 wind turbine platforms a year.

The offshore wind turbines are complex. The foundations extend some 30 meters into the seabed. Up to 40 meters of the turbine's tower is under water. Above the surface, the towers can rise to more than 100 meters.

"It's just an incredibly logical move," said Michael McNamara, head of European clean technology research at Jefferies International investment bank in London.

"You've got a shipyard sitting empty with skilled labor right there. Converting to offshore wind energy might not save every shipyard in the world, but I think we'll definitely be seeing more and more of this kind of thing in the years ahead."

The International Energy Agency believes offshore wind power will grow more than 100-fold by 2030.

McNamara said idled shipyards such as the Nordseewerke will be converted into centers for wind energy production in other countries, such as Britain and the United States, that are also planning major expansions into offshore wind energy.

McNamara said it is more than just infrastructure that make shipyards so attractive for wind energy infrastructure sites. They are also often close to the sea and offshore wind parks going up. And there is usually an abundance of skilled labor.

"You want to get your facilities up as close as possible to the windparks," McNamara said. "The shipyards are ideal. Offshore wind is going to be the fastest growing segment in the European market. The numbers to 2015 are just eye-popping."

A study for the Environment Ministry, which believes half of Germany's power can come from renewable sources by 2050, projected that wind turbines in the North Sea and Baltic could by 2050 be producing 25 percent of Germany's energy needs.

That kind of growth should keep the Nordseewerke plant humming for another 100 years at least.

(Editing by Sue Thomas)

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