UK tidal energy plagued by cost discrepancies, says ETI

Tidal energy is at risk of being priced-out of an increasingly cost-competitive low-carbon market in the UK, unless a successful Contract for Difference (CfD) agreement can be implemented, the Energy Technologies Institute (ETI) has warned.

The ETI has, on Monday (16 January), established at set of priorities that would need to be fostered by the UK Government if the marine energy industry is to keep pace with more established low-carbon energy sources such as wind and solar. Current costs for tidal energy are up to 10 times more expensive.

With 10 years of experience in the marine industry, the ETI has called for a shift in focus to exploit tidal stream technology commercially. It claims that the technology can compete with other energy sources “over the coming decades” but only if costs are reduced.

“The UK has some of the best tidal waters in the world, but these are generally a long way from grid connections and major population centres where the demand is greatest,” ETI’s strategy manager Stuart Bradley said.

“Whilst it has been demonstrated that you can create and capture energy from the sea it is currently very expensive to do so and this has to be addressed for the sector to grow. A rethink is required in wave to bring costs down, but the early signs are that bodies such as Wave Energy Scotland are tackling this challenge so support should continue to be provided to such work.”

ETI has claimed that the UK has “some of the world’s best tidal and wave resources” but that the industry has remained in “relevant infancy”. It warns that other marine renewables, such as tidal lagoons, currently lie between development stages of tidal stream and wave energy, all of which require large capital investments to deploy at scale.

Policy makers have the opportunity to enable large-scale deployment, the ETI notes, by striking successful CfD arrangements. In the 2016 Budget, £730m was allocated to next wave of CfD auctions – which will be used to support “other less-established technologies”.

Changing tides

ETI also suggests that world’s largest tidal stream project – the 398MW MeyGen tidal array in Pentland Firth, Scotland – should be given more support to allow it to reach maximum output and performance; essentially sending a signal to the industry that it can prosper in an enabling environment.

While tidal stream energy has been viewed as reliable, predictable and – unlike established renewables – low in visual impact, its generating capacity is restricted to remote locations away from the end consumers. ETI forecasts that the technology will work best at inhabited coastlines, acting as the primary source of energy consumption until grid integration and energy transportation becomes more efficient.

The Scottish coasts are a prime location for this, and the Scottish Government have responded with investment opportunities. It recently funded £7m to 16 different wave energy developers in order to help them commercialise their technologies.

Scotland’s commitment to the future of tidal and wave energy has not been equalled by the rest of the UK, despite the now-disbanded Department of Energy & Climate Change’s (DECC) estimate that theoretical tidal power capacity in the UK could range up to 30GW, equivalent to about 12% of electric demand.

Plans to build the world’s first tidal lagoon-based renewable energy system in Swansea Bay received long-awaited support last week. An independent report found that the project does indeed have the potential to be cost-competitive with other clean energy technologies by the mid-2020s, concluding “beyond question” that the project would bring “very real” economic benefits for the regional and national economy.

Waves and wind

While tidal energy could go from strength-to-strength under more enabling policies, wind energy could be set for a rise in fall. This is especially prominent in the US, where a Trump regime may dent renewable deployment.

Regardless of Trump, a new report from GlobalData has predicted a rapid growth in the wind energy market in the next two years, peaking at $81bn, before falling by $10bn a year later. The move away from coal and government support for clean energy will spark the surge, before clean energy tax credits removals ignite the fall, the report found.

Fortunately, the global outlook for wind energy looks set to remain steady, with GlobalData highlighting continuous growth in the market. China is expected to grow from one of the top three markets to account for more than a quarter of the global turbine market in 2020.

Matt Mace

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