SeAH Wind Ltd

Comes to Teesside

As the Freeport

Shuffle

Begins in Earnest

Tees Valley Mayor, Ben Houchen

Scott Hunter

14 April 2022

Picture the scene. A lonely figure heads out across the wasteland with nothing for company but a shovel, an official photographer and leader of Redcar and Cleveland Borough Council, Mary Lanigan. The four come to a halt at a predetermined spot and take up their respective positions, shovel centre stage, ready to break ground at the site of the GE Renewables Gigafactory at South Bank. That lonely figure is Tees Valley mayor, Ben Houchen, and the project to build the GE Renewables Gigafactory exists principally in his imagination.



Tees Valley Monitor first reported in December 2021 that GE had refused to sign the lease for the site at Teesworks, as it hadn’t won a sufficient number of contracts to warrant building its factory. Bizarrely, Houchen denied this, and continued to do so even when GE confirmed in a statement to the Northern Echo that the project was being put on hold.

It must have been quite tense for a couple of months, as Houchen wondered how he was going to talk his way out of this one. But then South Korean firm SeAH came to the rescue. Its British subsidiary SeAH Wind Ltd,  according to reNews in February, has signed a ‘”binding agreement” to build a factory on the Teesworks site to manufacture monopiles (the foundations on which wind turbines are erected). So, now all the talk is about SeAH, and its mammoth 40-metre-high factory, as high, Houchen tells his Facebook audience, as ten double decker buses or two angels of the north.

Quite what that ‘binding agreement’ consists of is not entirely clear, however. STDC board papers for March 2022 state that ‘heads of terms’ have been signed. But GE Renewables also signed heads of terms. They did so in March 2021 and obtained planning approval for their factory in September. But ‘heads of terms’ are not usually legally binding . So, if they have signed something that really is binding the STDC board is being uncharacteristically shy about declaring it.

But what of GE? Is everything still on hold? Consult the STDC board agenda papers for their latest meeting (March 2022) and you’ll look in vain. Most of the papers for that meeting are redacted as usual, but the CEO’s report is there, and there’s no mention of it.

So, the only available source of news about the progress of the GE plant is on that bastion of truth and transparency, Houchen’s Facebook page. In reply to a question recently, he asserted that the SeAH factory will be built alongside GE one. What he failed to make clear to that enquirer, however, is that the SeAH plant is to be built on the site previously designated as the site for the GE factory, a fact pointed out in reNews, but not picked up on elsewhere in the press.

If the GE factory project does eventually go ahead (which cannot be before 2023, when the next round of bidding for offshore wind contracts takes place), it will have to find another site.

This is not the only fact about the SeAH project that has not reached the local press. The announcement of SeAH’s investment seemed to come out of the blue in February.  Before then, few people on Teesside had ever heard of the company. The exception to that would be people involved in Able UK’s AMEP – Able Marine Energy Park - on the Humber.

When SeAH first announced last year that it intended to invest in the UK, and went on to win contracts to supply monopiles to the Hornsea 3 Offshore Windfarm (subject to final confirmation), it needed to make plans to build its factory. AMEP was the chosen location.  A Memorandum of Understanding was signed with Able UK, a planning application was prepared, and all of the requisite fanfare was performed.

In mid-November 2021, trade magazine Energy Watch was still talking about the forthcoming SeAH plant at AMEP. Then things went quiet. A month later GE announces it is putting its plans for its factory at Teesworks on hold. Another silence. 

The STDC board holds its regular on 16 December. The crisis at GE Renewables is not mentioned. Neither is SeAH. At some point between December and the end of March, the thought police at STDC see fit to take down the board agenda papers for that meeting, however. (Their reason for doing this is not clear).

Then SeAH announces it will be going to Teesworks instead. Offshore Wind, in an April article, observes that SeAH has not disclosed its reasons for the move. 

Shortly before the GE crisis began to unfold, Teesworks was having money worries, when Houchen surrendered control of Teesworks Limited to property developers, Corney and Musgrave, having discovered a £207 million ‘black hole’ in its finances. He reported in January that the whole scheme would have had to be mothballed had he not handed it over to the developers. 

SeAH’s sudden decision to switch to Teesworks must have come as an enormous relief to him, especially, as the Offshore Wind article points out, that SeAH obtained government funding last July to build the facility.

When news of the move was first published, Peter Stephenson, executive chairman of Able UK, expressed his ‘disappointment’.

 He acknowledged that there were issues with the speed of development of the infrastructure at AMEP, but added (according to reNews):

“Whilst recognising that AMEP has been offered grant support from Government, the reality is that this pales into insignificance compared to the levels of subsidy with which we now have to compete against”.

Or, in other words, this was ‘disappointment’ tinged with ‘apoplexy’. And it presents a conundrum. 

Stephenson asserts that subsidy is available to those who move to Teesworks, while Houchen speaks of a ‘black hole’. And SeAH is keeping quiet about why it decided to move. The suspicion is that the enticement to move came from a source other than Teesworks, that someone in central government oiled the wheels.

And for those who will take the move as evidence that freeports do not generate new business but simply encourage firms to relocate into freeport-controlled areas, we should point out that AMEP is itself part of a freeport. So, the move is from one freeport to another. As if there were a rank ordering of freeports, with Teesworks, despite its management issues, being higher up the food chain than Humberside.

And so someone, some guardian angel, has brought SeAH to Teesworks and spared Houchen that walk of shame to start digging for the GE plant of his imagination.

To which we should add one last point. Houchen has made much on his Facebook page of the size of the SeAH facility. His choice of analogy is odd, given that double decker buses are a rarity in this region, and the Angel of the North is some distance away. For those who would prefer an analogy that is closer to home, we can clarify that the factory will be fifteen metres shorter than the Dorman Long Tower.