finance

SNP and Lib Dems hail Westminster u-turn on tidal power funding



Scottish politicians have hailed the UK Government’s decision to reverse course and allow a ringfenced £20m annual pot of investment into tidal stream renewables in the upcoming Contract for Difference (CfD) round.

Following efforts by the Scottish industry, a pot of money has been confirmed for wave and tidal energy – seen as vital to take this part of the renewables industry to the next stage of full commercial rollout.

SNP Westminster leader Ian Blackford said: “This partial Tory u-turn only comes after months of pressure from the SNP, but as the Scottish industry has made clear it does not go anywhere near far enough to ensure tidal stream energy can reach its full potential.

“Tidal has the potential to be a major Scottish success story and a key part of Scotland’s renewable energy revolution – but it can only properly flourish if the UK government delivers the scale of funding required.

“The Chancellor must increase the budget to at least £71m so world-leading Scottish companies aren’t restricted in their ambitions.”

Liberal Democrat MP for Orkney and Shetland Alistair Carmichael said: “I have to pay tribute to Neil Kermode and the team at EMEC in Orkney and Andrew Scott and Orbital Marine in Shetland, amongst many others in the isles and beyond, like Sue Barr of the Marine Energy Council, who have worked in concert to make the case for tidal stream energy.

“I could quibble over the exact amount given – and of course there will be a great deal of work to be done to get this support into action – but now it is time to recognise a genuine win for the isles and for the country.”

As part of the fourth allocation round of the CfD scheme due to open next month, the UK Government will ensure that £20m per year will be ringfenced for tidal stream projects. This will bring the total funding for this allocation round to £285m per year.

Energy Minister Greg Hands stated: “Our renewable energy auction scheme has been vital to the UK becoming a world leader in clean electricity generation and helping to bring down prices for consumers.

“Today’s dedicated backing for tidal stream power is opening up a new chapter for Britain’s coastal communities and advancing the possibilities for Britain’s marine energy sector to play a significant role in delivering the UK’s green industrial revolution.”

Scottish Secretary Alister Jack added: “With strong wind and solar power industries in the UK it is the natural next step to explore our tidal energy capabilities. It’s an exciting development in supporting of our domestically-produced renewable energy sources.”

The CfD scheme is the UK 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 will open on 13 December, with the auction process aiming to support up to 12GW of low-carbon electricity capacity – more than the last three rounds combined.

The contracts are allocated through a competitive process, where the cheapest projects in each technology group are awarded contracts first.

Renewable projects are subject to strict planning controls that afford protections to local communities and the environment and guidance will ensure communities are engaged with and are able to benefit from renewable infrastructure in their area.

CfDs should give greater certainty and stability of revenues to electricity generators by reducing their exposure to volatile wholesale prices, while protecting consumers from paying for higher costs when electricity prices are high.

The new budget is for tidal stream projects, not tidal range, which is a different technology and not eligible to enter into the CfD scheme.

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