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Gamesa's chief plays down 'yes' vote impact

THE head of Spanish wind turbine group Gamesa has blown a hole in the unionist argument that UK green subsidies to Scotland would dry up in the event of a "yes" vote.

UPBEAT: Gamesa??s Ignacio Martín believes independence would not make a big difference to the Scottish wind industry.

Ignacio Martín, executive chairman of the Basque company, indicated that he did not think independence would make a big difference to the Scottish wind industry, speaking more frankly about the political situation than many business leaders.

His comments will jar with the Better Together campaign, which has seen politicians from all three leading UK parties routinely arguing that the current system in which UK electricity consumers subsidise new Scottish wind farms would not survive independence.

Gamesa is seen as one of the brightest hopes for establishing a substantial manufacturing base for offshore wind in Scotland, having signed a memorandum of understanding with Forth Ports over Leith in Edinburgh and established a research and development centre in North Lanarkshire.

Speaking ahead of the unveiling of Gamesa's first offshore wind turbine in Gran Canaria, it was also confirmed that a Scottish port is in the running to host the demonstrator site for the 5MW device along with two other European sites, one of which is in Belgium.

Securing a demonstrator is seen as a vital step towards landing a full manufacturing operation.

Mr Martín indicated that Gamesa was waiting to see how current legislative reforms to renewables pan out towards the end of the year in the UK and would choose a site in the spring.

On the political situation, he told The Herald: "This is not going to affect our business in a major way.

"We believe that in the end, there won't be any macro-economic change [in the event of independence]."

When pressed he agreed that it was hard to say for certain that subsidies would continue at current levels, but he compared it to the various other uncertainties that a 'yes' vote could bring.

"If Scotland isn't part of the European Community. If Scotland don't use the pound. If, if, if. For sure it will affect the offshore business, but I don't think there will be a major change."

He said it was a difficult time, with European demand for onshore turbines weaker than expected due to political uncertainty in the UK and Germany and subsidies being put on ice in the Spanish market. On the other hand, business has been stronger for the company in emerging markets such as India, Brazil and China.

He confirmed that the intention was to build a demonstration park for the new turbine in 2014 with a view to making available to the market the year after.

If Gamesa chooses Scotland, it will be following Samsung, which has just set up in Methil in Fife; and Siemens and Mitsubishi, which are both due to set up in Hunterston. Of the three, however, only Samsung has given firm indications that it would likely manufacture in Scotland.

On the subject of the UK's electricity market reform (EMR), which is due to be resolved in December, Mr Martín was unsure whether the subsidy level would be set high enough to make offshore wind investible.

Mr Martín, who was installed in 2012 to spearhead a restructuring that has led the company back into profit this year, said: "We really don't know [what will happen]. Wait and see.

"We have meetings with UK ministers which make us pretty confident that the [subsidies] will be good enough. But then when we look at the difficulties with dealing with the Labour Party and some declarations from the UK Government, it's making us a little uncomfortable.

"It's more or less the same situation as we are facing in Germany."

Gamesa is also working on the 8MW successor to the current new model, which will be used in deep waters such as those off Scotland. Much of the research and development for the project is under way at the company's North Lanarkshire base, although Mr Martín admitted that the company had slowed down the speed of the work in response to market uncertainty.

Having said that, he was "pretty confident" that Gamesa would go ahead with the 8MW turbine.

"We believe that in that market, there will only be three to four players and we are going to be one of them," he added.

"So if we succeed we should get 25% of the market."

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