Four tidal stream projects totalling 40.82 MW were successful in securing contracts in the fourth allocation round of the UK government’s contracts for difference (CfD) scheme in a boost for the fledgling sector.
The outcome of the auction, announced today, saw support awarded to 93 renewable energy projects across various technologies totalling almost 11 GW.
SIMEC Atlantis Energy Ltd (LON:SAE) won a contract for 28 MW at its MeyGen tidal power project in Scotland. The company said in a stock exchange statement today it will seek to achieve financial close for this next phase of the project by 2024 and start operations in 2027.
According to chief executive Graham Reid, the developer now has “a clear runaway, with future CfD rounds, to deliver the full 400 MW of tidal power generation at MeyGen.”
The competition resulted in a strike price of GBP 178.54 (USD 212.1/EUR 208.4) per MWh for the tidal stream technology.
At the same time, Scottish floating tidal stream turbine developer Orbital Marine Power Ltd secured CfDs for two projects in Eday, Orkney with a combined capacity of 7.2 MW, estimated to be capable of powering up to 7,200 homes.
Spanish tidal energy developer Magallanes Renovables, meanwhile, won CfD support for a 5.62-MW project at the Morlais site in Wales for delivery in 2025/26. In April 2020, Magallanes became one of three developers that signed up to the Morlais tidal stream energy project, where the Crown Estate has designated a zone with the potential to reach 240 MW over time.
Commenting on the tidal stream awards in the auction, Simon Cheeseman, wave and tidal energy sector lead at invasion centre the Offshore Renewable Energy (ORE) Catapult, said: “This is the beginning of a journey to 1 GW tidal deployment capacity by 2035, helping the UK achieve its Net Zero targets, and driving down the cost of tidal stream, making it competitive with other renewable sources of electricity." He called for longer-term support through future CfD allocation rounds to provide investor certainty.
The auction had GBP 20 million of support per year reserved for tidal stream projects.
Ocean Energy Europe hailed the first-ever tidal stream auction winners under the UK’s CfD scheme and said that the UK now joins Canada and France in providing revenue support to “unlock the huge potential of the innovative ocean energy industry.”
Sue Barr, chair of the UK Marine Energy Council, remarked: “Tidal stream is forecast to be cheaper than new nuclear at the point of 1 GW of deployment, supports the UK creating sustainable jobs and supply chains in coastal communities and beyond, whilst boosting energy security through an entirely predictable baseload-style renewable energy resource.”
(GBP 1 = USD 1.188/EUR 1.167)
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