It will invest £20m a year in tidal stream electricity as part of its renewable energy auction scheme,.
As part of the fourth allocation round of the Contracts for Difference Scheme (CfD) due to open next month, the UK government will ensure that the money is ringfenced for tidal stream projects. The CfD scheme is the government’s primary method of encouraging investment in low-carbon electricity.
Scotland-based tidal companies Nova Innovation and Atlantis Energy welcomed the decision, saying that the investment signals the UK government’s confidence in the role tidal energy can play in delivering net-zero carbon targets. “It creates a clear route to market for UK tidal energy companies like Atlantis and Nova that will create thousands of jobs across our coastal communities,” they said.
Simon Forrest, CEO of Nova Innovation, said: “We are delighted that tidal stream energy has been recognised by the UK Government as a core part of the UK’s green industrial revolution. The ring-fenced investment will deliver a route to market for tidal energy companies such as Nova Innovation and Atlantis Energy – turbocharging the delivery of tidal energy across the world.”
Graham Reid, CEO of Atlantis Energy added: “We would like to thank all who have championed our industry and believed in the global role tidal stream energy can play in the fight against climate change. We look forward to continuing to work in collaboration to deliver our ambition of more turbines in the water.”
The aim of the new funding is to give the marine energy sector a chance to develop technology and lower costs in a similar way to the offshore wind industry. The government said that history has illustrated the effectiveness of the scheme’s design in keeping costs down. Between the first allocation round in 2015 and the most recent round in 2019, the price per unit (MWh) of offshore wind fell by around 65%.
“Over time marine technologies have the potential to significantly contribute to our decarbonisation commitments and could support hundreds of green jobs across the country, with projects currently in development in North-West Scotland, North Wales and the Southern coast of England,” said the announcement. “Tidal energy has the potential to be a very reliable source of generation, given 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, building on the UK government’s commitment to build a strong, home-grown renewable energy sector to reduce the reliance on fossil fuels and exposure to volatile global gas prices.”
Business and energy secretary Kwasi Kwarteng said: “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. 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 today 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 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%.
Scottish secretary Alister Jack said: “This UK government allocation of funding for the tidal industry in Scotland, and across the UK, is tremendous news. Harnessing the powers of our seas is a vital step in our transition to the use of greener, cleaner energy and underlines the UK government’s commitment to create and protect highly-skilled jobs while on our journey to net zero by 2050.
“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.”