The UK government has set aside £20m a year in ringfenced support for tidal power projects, throwing a lifeline to developers of technology that is seen as offering a stable future source of green electricity.
Developers had warned that continuing refusal by the government to ringfence funding for tidal stream in a key renewable energy auction next month could be fatal for UK hopes to lead in the emerging marine power sector.
UK companies are global leaders in tidal power development, with the waters around Orkney in Scotland home to both the world’s first commercial seabed-mounted turbine array and its largest individual turbine.
But the sector has struggled to secure funding as it competes with much cheaper, more mature technologies, such as offshore wind at government contract auctions. Early marine power technologies also struggled with engineering challenges as devices have to withstand tough conditions at sea.
“The investment today provides a major push for tidal power to become a key part of the next generation of renewable electricity projects,” said Kwasi Kwarteng, UK business and energy secretary, in a statement on Wednesday.
The UK move followed heavy lobbying by the marine energy sector and pressure in parliament in recent weeks from opposition politicians including from the Scottish National party and Liberal Democrats.
UK “contracts for difference” auctions give successful bidders a guaranteed fixed price for the electricity they produce for an agreed number of years, greatly reducing the risk of projects that are based on relatively new technology. The guaranteed income helps developers raise private finance to fund schemes.
The ringfenced £20m is only a small proportion of the £285m-a-year contracts to be auctioned from December 13. However, Gavin Smart, head of analysis at the Offshore Renewable Energy Catapult innovation centre, said it would “kickstart” UK tidal stream in a global sector with enormous potential.
“I’m sure many in and around the industry would be hoping for a larger budget, but this is £20m more than was available yesterday!” Smart wrote in a blog post.
Neil Kermode of the European Marine Energy Centre in Orkney, a focus of tidal power technology development, said the announcement was a major relief for the sector. “I am absolutely sure that we will show it works and that will give government the confidence to do more in the future,” Kermode said.
Compared with intermittent wind and solar, tidal power offers what the UK government called the “clockwork predictability of the tides”.
“Including this in the UK’s low-carbon energy mix will make it easier to match supply with demand,” it said.
But while there are a huge number of potential sites for tidal power around the world, developers still need to find cheaper ways to cope with the technical challenges of tapping powerful currents in often challenging marine environments.
Orbital, which developed a 2MW tidal energy machine, the world’s most powerful, said the decision “validated” the UK market for tidal stream power.
“We have long called for this sort of ringfenced funding to develop this important technology and to further build a homegrown industry around it,” said Andrew Scott, Orbital chief executive.
SIMEC Atlantis Energy, developer of the MeyGen tidal stream power project in the Pentland Firth between Orkney and Scottish mainland, said earlier this month that a “route to market” was all it needed to deploy a further 80MW there.