British marine energy developers hope for a turning point in 2021

Over the past month, a floating platform the length of seven double-decker buses has been moored in the waters off the Orkney Islands, preparing to generate electricity from the strong tidal currents that flow around the Scottish archipelago.

The machine, dubbed “O2” by its Edinburgh-based manufacturer Orbital Marine Power, generates up to 2 MW and is the world’s most powerful tidal turbine to date, capable of delivering clean electricity to 2,000 homes.

Although its capacity is modest compared to the latest offshore wind turbines that push 14 MW, the launch of O2 in April marked a key moment for the small but ambitious UK marine energy industry after a few difficult years.

British companies were among the early pioneers of marine energy technologies, which harness the power of tides and waves to generate electricity, more than a decade ago.

But since 2017, when the government cut a key subsidy stream, the sector has struggled to secure funding as it competes with much cheaper and more mature ‘green’ technologies, such as offshore wind, in the only area of ​​state support that remains: the biennial Renewable energy auctions “contracts for difference”.

A much-publicized £ 1.3bn program in Swansea Bay that involved building a 9.5km breakwater was rejected by ministers in 2018 because of its cost. Several early comers seeking to harness wave energy, such as Aquamarine Power and Pelamis in Scotland, collapsed.

An artist’s impression of the Swansea Tidal Lagoon Project, rejected by ministers in 2018 © Tidal Lagoon Power / PA

But those who survived hope 2021 will be a turning point.

The 45 UK companies that make up the tidal and wave energy sector are doing their utmost to convince the government to procure at least 100 MW of marine power capacity at the next auction in December.

They warned ministers that without tailor-made support, the UK risks repeating the same mistakes with marine energy as it does with offshore wind. Although UK waters are home to the world’s largest offshore bays, the lack of state support means Britain has ceded the lead in wind turbine technology to countries like Denmark and China, which have supported domestic manufacturers.

“We do [still] world leader in this field while we [once] did it in offshore wind, but subsequently lost that market due to not wanting to provide innovation and manufacturing capacity here in the UK, ”said Sue Barr, President of UK Marine Energy Council. “These technologies are already there,” Barr said, “but bringing them to market on a full scale. . . is very difficult financially ”.

Further details on the auction, which offers contracts guaranteeing a minimum price per unit of electricity, in turn allowing companies to borrow against future sources of income, are to be agreed this summer.

A commitment to support marine energy would give the sector a boost. According to RenewableUK, there are only 10.9 MW of operational tidal and wave energy projects in UK waters. These include the world’s first tidal network installed by Edinburgh-based Nova Innovation in 2016.

The developers argue that tidal projects in particular are more reliable than intermittent renewables such as wind and solar, given the predictability of the tides.

Andrew Scott, Managing Director of Orbital

Andrew Scott, Managing Director of Orbital: ‘We have this huge industrial advantage where we are building from a UK supply chain and deploying around outlying coastal regions’ © Jo Hanley / Orbital Marine Power

Marine energy is also playing into Prime Minister Boris Johnson’s “leveling up” agenda and pushing for more “green jobs”, they say. The industry relies on a predominantly UK-based supply chain, while new projects would generate work in seaside towns, many of which are among the UK’s most disadvantaged areas.

“We have this huge industrial advantage where we build from a UK supply chain and deploy around outlying coastal regions,” said Andrew Scott, Managing Director of Orbital.

About 80% of the O2 content comes from UK suppliers. In contrast, only 29 pence per pound of offshore wind capital expenditure remains in the UK.

“We want the UK to do with the tide what Denmark did with the wind,” said John Meagher, director of Scottish tidal company Nova Innovation. “The UK is at the forefront of the world. It really is an open goal. “

Britain’s Marine Energy Council has said the sector could be worth £ 76 billion by 2050 as governments turn to a range of clean energy sources. But UK technology has caught the attention of other countries, particularly Canada, which is courting UK businesses with support that is not available in their country.

“You’ve already seen a bit of knowledge leakage. . . overseas markets, in Canada in particular, ”said Simon Cheeseman, wave and tidal energy specialist at the Offshore Renewable Energy Catapult.

The sector has been struggling since March 2017, when a previous subsidy scheme to support green technologies, the Renewable Energy Bond (RO), closed its doors to new projects, which is why the auction of December is so crucial.

The government declined to comment on the details of the auction, but referred to a white paper last year that promised to “consider the role of wave and tidal power, after further assessment of commercial and technical evidence. “.

A new turbine arrives for the Nova Innovation tidal network off the Shetlands in October 2020

A new turbine is arriving for the Nova Innovation tidal network off the Shetlands in October 2020 © Ivan Hawick / Nova Innovation

Despite the challenges, 124 MW of tidal projects are ready to bid at auction. With a minimum commitment of 100 MW, the government would put the sector on a path to significant cost reduction, Cheeseman said. “The more often you deploy, the more you learn, the faster the costs drop,” he said.

Still, cost remains a sticking point. Tidal power developers have offered guaranteed prices of around £ 250 per megawatt hour (MWh) for the auction. In contrast, offshore wind developers participating in the 2019 auctions have agreed to build projects at guaranteed prices as low as £ 39.65 / MWh.

But costs are coming down and the Marine Energy Council has said a price below £ 90 / MWh is “eminently achievable” if the industry can deploy 1GW of projects and beyond. This comes down to less than the £ 92.50 / MWh guaranteed to developers of the Hinkley Point C nuclear power plant under construction in Somerset.

Josh Buckland, director of consulting firm Flint Global and former government adviser, said the marine energy industry “needs a clear route and a clear evidence base for how it’s going to cut costs.” . He admitted that recent tidal projects were potentially more ‘scalable’ than the Swansea Lagoon discarded in 2018.


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