UK tidal stream CfD investment could back up to 60 MW, industry reacts

The Orbital O2 tidal turbine. Source: Orbital Marine Power Ltd

November 25 (Renewables Now) - UK technology innovation centre Offshore Renewable Energy Catapult (ORE Catapult) estimates that the newly announced support for tidal stream projects could lead to the deployment of between 30 MW and 60 MW of tidal stream capacity in the UK between 2025 and 2027, depending on the prices bid by developers.

On Wednesday, the UK government said that as part of its contracts for difference (CfD) auction opening next month, GBP 20 million (USD 26.7m/EUR 23.8m) per year will be ringfenced for tidal stream projects.

“This fires the starting gun for tidal to establish itself in the UK’s energy system mix, encouraging deployment that will drive cost reduction towards GBP 90 MWh at 1 GW deployed capacity,” said ORE Catapult’s research and innovation director Stephen Wyatt.

By 2030, the UK could see a net cumulative benefit of GBP 1.4 billion, including significant exports and the creation of some 4,000 jobs, Wyatt added.

Ocean Energy Europe also applauded the UK government’s announcement, saying it will support the installation of at least 34 MW of tidal energy in the coming years.

“It is fantastic to see the UK seize the opportunity of a new home-grown renewable energy industry. The UK Government has rightly identified the many benefits of ocean energy, e.g. clockwork predictability, grid balancing for variable wind and solar, and local economic development,” commented the organisation’s chief executive Remi Gruet.

Morag Watson, director of policy at Scottish Renewables, said that with complementary action from the Scottish and Welsh governments the ringfenced funding could bring about a global success story for marine energy.

The move was also welcomed by sector players such as Scotland-based Orbital Marine Power. According to the company, the decision provides a more level playing field for its floating technology to aid the net-zero transition.

“Having this clear, positive signal from UK Government gives us the platform to grow the investment in our pioneering business and unlock the vital investments we need to make in our supply chain and projects to deliver a new commercial renewable sector,” said the firm’s chief executive Andrew Scott.

Neil Kermode, managing director of the European Marine Energy Centre (EMEC) in Orkney, said: “Support for the first large arrays of tidal stream projects is an incredibly positive signal for investment in marine renewable energy – I want to thank the numerous Ministers, MPs and civil servants who were convinced by the case we put forward, and understood the potential benefits to our economy, environment, and exports this new industry can bring.”

Ethical investment crowdfunding platform Abundance Investment hailed the announcement, noting that it has raised almost GBP 20 million from investors to support tidal energy projects since 2018.

Scottish media, however, reported that the Scottish National Party (SNP) is displeased with the UK government’s funding decision. Prior to the announcement, the SNP pressed for the UK government to introduce a minimum of GBP 71 million in ring-fenced funding for the sector. Ian Blackford, the party's leader in the Commons, later commented in the following way:

(GBP 1 = USD 1.335/EUR 1.191)

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Browse all articles from Plamena Tisheva

Plamena has been a UK-focused reporter for many years. As part of the Renewables Now team she is taking a keen interest in policy moves.

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