The tidal energy industry in the UK is set to benefit from a £20 million per year investment recently announced by the Government.
The investment has been pledged as part of the UK Governments flagship renewable energy auction scheme. As part of the fourth allocation round of the Contracts for Difference Scheme due to open next week, £20million per year will be ringfenced for Tidal Stream projects, bringing the total funding for this allocation round to £285million per year UK-wide. The funding will give the marine energy sector a chance to develop their technology and lower their costs in a similar way to the offshore wind industry.
“As an island nation we are perfectly placed to capitalise on clean marine energy, building on our booming offshore wind sector which is now a British industrial success story,” commented Business and Energy Secretary Kwasi Kwarteng. “We hope to see marine energy follow in the successful footprints of other renewable technologies, where we’ve seen costs fall dramatically in recent years thanks to UK government support.
“The investment provides a major push for tidal power to become a key part of the next generation of renewable electricity projects needed to strengthen energy security as we work to reduce our dependency on volatile fossil fuels.”
The Contracts for Difference (CfD) scheme is the government’s primary method of encouraging investment in low-carbon electricity. The scheme has helped to deliver substantial new investment and reductions in the costs of capital for some renewable technologies, such as helping to reduce the price of offshore wind by 65%.
This fourth round of the Contracts for Difference Scheme will open on 13 December 2021. The UK government will launch this auction process with the ambition of supporting up to 12GW low-carbon electricity capacity – more than the last 3 rounds combined.
The news has been welcomed by industry, who have been calling for a dedicated pot of funding for tidal power.
“This is a major step forward for the UK’s world-leading tidal energy industry, allowing us to ramp up the roll-out of our cutting-edge marine technologies and increase the pace of innovation in the sector to become more cost competitive,” said CEO of Renewable UK, Dan McGrail. “Ring-fenced funding for tidal stream doesn’t just unlock private investment and secure green jobs today - it also puts us in pole position to capitalise on exports to the global market in due course.
“We need a range of renewable technologies to get us to net zero as fast as possible. As an island nation with superb tidal energy resources to harness, it’s clear that tidal stream should have a key role to play in our shift to clean energy.”
“The impact of this support cannot be overstated,” added Chair of the UK Marine Energy Council, Sue Barr. “Here in the UK we have the knowledge, skills, people and projects to lead the world in marine energy, but we have been missing a vital piece of the puzzle to unlock investment and allow the sector to scale-up and deliver. The marine energy sector stretches the length and breadth of the UK - from the Isle of Wight to Orkney and Shetland.
“This dedicated ringfence will secure our domestic market, support decarbonisation and will enable tidal stream energy to develop; delivering export opportunities, green jobs, and economic growth in the process.”