Dong Energy will not be investing in the £450m Able Marine Energy Park, at North Killingholme, which was expected to create 4,000 jobs and was a “critical” part of plans to make the Humber a world leader in green energy.
In a further blow, Dong said although blades for the vast offshore wind farm making up Hornsea Project One will be manufactured at the new Siemens factory in Hull, other components made elsewhere in Europe could be bought straight to the site 120km offshore, rather than being assembled on the Humber, at Grimsby or Hull.
Cleethorpes MP Martin Vickers said he was disappointed, but not surprised.
The company signed a memorandum of understanding with Able UK last July.
The Government also ploughed nearly £15m through the Regional Growth Fund to prepare the site, earmarked as a hub for manufacturing and assembly of wind turbines.
Mr Vickers said it had been clear for some time that Dong was not going to commit to the extent that was originally hoped.
He added: “The previous Energy Minister, Angela Leadsom, when she was involved in negotiations used the phrase it was ‘payback time’ since Dong had received considerable support from the taxpayer and would like to see some return on that investment.”
But he insisted: “We haven’t been sold a pup. We have still got hundreds of jobs in Cleethorpes and Grimsby that would never have been there five years ago.”
Northern Powerhouse Minister Andrew Percy, MP for Brigg and Goole, said it was “deeply disappointing”.
Lord Haskins, chair of the Humber local enterprise partnership, said the Government had been putting pressure on Dong to source more locally, but Dong was taking a “commercial” position after plans for offshore wind were scaled back.
He said it all depended now on how much additional renewable energy the Government, which has yet to decide on whether to go ahead with the Hinkley Point nuclear project, is prepared to support. He added: “I just don’t think it is the end of the story, but it is obviously very worrying.”
Dong said a strategic review which examined potential hub sites concluded that existing ports could support demand from offshore wind developments and it would be “difficult to justify the scale of investment required to promote a single large-scale staging and manufacturing facility.”
It added: “Dong Energy remains fully committed to the Humber region and we expect to have invested £6bn in the area by 2019.”
Developers Able UK which has invested £37.5m in site preparation, including surfacing large areas of the site, claimed AMEP could still play a crucial part in the Humber becoming a “world-class energy estuary”.