THE co-founder of a Glasgow-based steel company focused on the global energy sector has warned the depressed price of oil is leading renewable developers to postpone projects, leading to difficulties for companies which feed the supply chain.
Michael Craig of EEW Energy Services said the cheaper oil and gas means it is not economically viable for some renewables projects to go ahead.
He was speaking as the firm, which is backed by German steel giant EEW Group, announced it had won a seven-figure deal to supply steel to an offshore wind farm on the Norfolk coast.
Mr Craig, who formed EEW Energy Services with financial officer Alan Hyslop in 2013, hailed the "seven-figure" contract as an important win at a challenging time for the industry.
While EEW derives as much work from renewable projects as the oil and gas industry - one of its first deals was with Belfast-based Harland and Wolff to supply the Humber Gateway Substation Project, a wind farm off the Yorkshire coast - Mr Craig said it does not follow that there is an upswing in the renewables sector when conditions are tough in oil and gas.
He said: "If the price of oil and gas is low it doesn't make sense to produce renewables.
"For all you get people wanting to go down the renewables route, the economic case drops away when there is a glut of oil and gas on the market.
"The oil companies are pushing back capex decisions, and the renewables firms are finding investment decisions are not being made. The economics don't stand up."
"There are some fairly big projects due to come through, but they are all being pushed out. We bid for one oil and has deal six weeks ago but the owner has delayed [the project]. In our industry a lot of companies are really, really hurting."
Although EEW supplies projects across the globe - last year it supplied steel to an offshore project in Indonesia - Mr Craig said no part of the worldwide energy industry has been unaffected by the fall in oil prices.
Asked how the company was dealing the current impasse, Mr Craig said the main focus is on managing costs while making sure it is ready when conditions improve.
He said: "I'm old enough to have been through this a few times. You know it will come back and invariably you are up against it before you know it."
EEW, which is headquartered in Singapore, has been set up to into its 75-year old backer's worldwide manufacturing and supply chain capability. This allows it to supply high performance and complex steel for the upstream oil and gas and offshore renewable sectors.
The company has begun supplying the structural steel for the sub-station's jacket structure of the Dudgeon wind farm in coastal Norfolk.
It has imported the steel from Erndetbruck in Germany, where EEW Group has a massive steel fabricating mill south of Dortmund.
The electricity which the Dudgeon farm generates will be brought onshore via a seabed cable on the Norfolk coast, and ultimately feed into the National Grid. It will create enough energy to power 41,000 homes. The wind farm is not due to begin producing electricity until 2017.
Mr Craig said: "Our manufacturing capability in Germany uses "point to point" construction methodology whereby detailed components are manufactured using the client drawings and are delivered in a ready to assemble format.
"This eliminates a significant portion of scrap or wasted time on any project and increases on-site productivity."
"EEW Germany have supplied over 100 projects of this type with the most recent award being for the Culzean Central Production Platform which will be installed by Maersk Oil in the UK North Sea after fabrication in Holland."
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