BEIS eyes ‘pot within a pot’ for marine energy

Kwasi Kwarteng has revealed that he is “very sympathetic” to giving wave and tidal energy its own “baby pot” within the Contracts for Difference (CfD) auction process.

In a debate on marine energy in the House of Commons on Tuesday, the energy minister revealed that he is looking “seriously” at giving renewable marine technologies a ringfenced CfD “pot within a pot”.

Under recently announced reforms of the CfD subsidy bidding process, wave and tidal energy projects will compete with other less established technologies in Pot 2.

But Kwarteng told the House he is considering proposals to allow tidal and wave developers to compete for an allocated amount within Pot 2 that will enable their projects to be economically viable.

“I am very sympathetic to ideas…. of having a pot within a pot.

“That means that within pot 2 there would be a reserved quantum for marine projects, particularly tidal projects, to be able to compete for.

“We can potentially get some movement on the auction.

“BEIS will certainly look at the auction seriously. We hope to push forward with that innovation.”

Kwarteng also said he would raise with the Treasury proposals by the marine energy industry for tax cuts for projects until they start to generate electricity.

He said: “Once that is up and running, perhaps we could have a further debate and a further push on tax treatment. I would clearly be happy to raise that with Treasury colleagues.”

However, the minister acknowledged that there is an issue, particularly within the Treasury, about the higher upfront costs of supporting marine technology.

Plans to build a tidal energy plant in Swansea Bay foundered two years ago when the government baulked at the high capital costs that would have been required to kickstart the project.

The government recently announced a call for evidence on marine energy after the development consent order for the Swansea Bay project lapsed.

Kwarteng made his comments when responding during a debate instigated by Orkney Islands MP Alistair Carmichael, whose constituency is the UK’s main hub for wave power research and development.

He called on the government to support the industry in order to ensure that the UK does not fall behind other countries.

“The industry is ready to move, the technology is there, the private investment is primed but it does need a helping hand from government at this critical stage.

“History tells us that, although we have an advantage having done the groundbreaking research and development work, there are plenty of other places in the world where that could be deployed commercially, as happened with the development of onshore wind.”