The recent award of 10 leases to wave and tidal developers in Scotland and the publication of an extensive report on marine energy is testament to the UK Government's commitment to promoting marine energy. But with energy power prices already set to increase in order to fund off-shore wind and associated infrastructure, can the UK afford the additional investment required to make marine energy a feasible alternative to other low carbon technologies?
Government report highlights the potential of marine power
Recent developments indicate that the current Government is firmly committed to attracting investment in wave and tidal power.
The Marine Energy Action Plan published on 15 March 2010 states that marine technology has the potential to generate sufficient power for up to 15 million homes and to save up to 70 million tonnes of CO2 by 2050. With 5,581 miles of coastline and a highly skilled workforce, the UK is ideally placed to develop marine and tidal technologies.
Crown Estate awards 10 leases to wave and tidal developers
Positive signals that the UK's marine potential is being realised are emerging. The Crown Estate has announced the award of 10 new leases to wave and tidal developers (SSE, OpenHydro, Marine Current Turbines and Scottish Power), representing an ambitious target of 1.2GW of capacity, up from the original target of 700MW.
Troubled waters ahead?
As the new developers in Pentland Firth and Orkney waters will be keenly aware, the marine industry still faces significant obstacles, something which the Marine Action Plan, produced jointly by Government and the private sector, acknowledges:
- meeting ambitious marine targets will require huge investment over the mid to long term (the National Energy Foundation has estimated that meeting the Crown Estate's 1.2GW target could cost between £3.6 and £4.8 billion). Appropriate market incentives must be put in place to attract sufficient private sector interest, and as the Shadow Minister for Energy, Charles Hunt MP, has noted the challenge is to create financial incentives which will encourage private sector investment not just up to 2020, but for subsequent decades as well;
- attracting short term funding to cover initial R&D: In its report, "The Next Steps for Marine Energy" published in March 2010, renewableUK recommends that the UK Government commit £220 million in capital support for technology development over the next five years;
- the need to reduce costs and improve efficiencies in a still emerging area of technology; and
- removing regulatory obstacles to the deployment of marine devices. While recent steps such as the implementation of the Marine and Costal Access Act 2009 are welcomed, there is still more to do.
In response to such obstacles the Marine Energy Action Plan sets out a number of recommendations, including:
- consideration of the support levels for marine technologies under the review of the banding of the Renewables Obligation in Autumn 2010. Electricity generated from wave and tidal technology in England and Wales currently receives 2 Renewables Obligation Certificates (ROCs) per MWh, although in Scotland tidal power receives 3 ROCs per MWh and wave power receives 5 ROCs per MWh;
- ensuring that appropriate levels of targeted funding are available to bridge the technology market failures that exist in this developing sector, subject to the budgets in the next public spending round;
- the formation of a UK-wide strategic co-ordination group to develop a planning and consenting roadmap for all types of marine renewables. A Ministerial Task Force on Marine Energy will also be formed, bringing together key players to oversee future work on the Marine Energy Action Plan;
- establishing guidelines and best practice in the development of new technologies; and
- building a UK marine energy supply chain and utilising the current skill base already established from the offshore wind, oil and gas, and maritime industries.
With the prospect of a change in Government, it will be interesting to see how much focus is devoted to this fledgling technology in the face of competing interests from offshore wind, nuclear and other technologies. Whatever the result of the next election, it is difficult to see where the estimated £3.6 to £4.8 billion can be found to fund marine technology given the current constraints on public funding.