Benefits of supporting tidal power ‘outweigh costs’

The government has significantly undersold the UK’s potential in the tidal power sector in its energy white paper, a House of Commons committee has told Kwasi Kwarteng.

In a letter to the secretary of state for business and energy, published yesterday (30 March), the Environmental Audit Committee (EAC) said it was “disappointing” that the December 2020 document did not go further than a commitment to considering the role of tidal and wave energy.

“This single reference in a substantial policy document significantly undersells the UK’s potential in this field and sends the weakest of policy signals to potential investors.”

The letter, signed by the committee’s chairman Philip Dunne MP, urges the government to “rectify this lapse” in subsequent policy statements on the UK’s renewable energy mix.

A strong case exists to stimulate the diversification of marine renewables through the provision of appropriate support to set each sector on the route to swift commercialisation and expansion, writes Dunne: “There is substantial potential for the tidal sector to make a significant and distinct contribution to the UK’s future mix of energy generated from renewable sources.”

The letter says the UK has world-leading technological development in the tidal stream sector, which harnesses energy from sea and ocean currents, such as those currently being tested in the Pentland Firth off the coast of the Orkney Islands. Existing tidal stream projects in development already have the capacity to deliver 1GW of electricity to the grid, the committee has been told.

The potential benefits of tidal stream merit government support for the development of tidal stream projects to a stage where they can attract significant commercial investment, the letter adds.

The committee recommends that the government should develop an administrative strike price in its next Contracts for Difference auction, which is scheduled to take place next year, to unlock the full deployment of tidal stream projects in development.

Dunne writes that this step is the prerequisite to attracting large-scale investment and the upscaling of developments that will result in a rapid reduction in generation costs from the technology.

The letter also recommends that the Department for Business, Energy & Industrial Strategy (BEIS) and the Treasury should consider the industry’s proposal for a power purchasing agreement model which could see developers and investors paid for energy generated without the costs being passed on to domestic bills.

The UK’s 7,500 miles of coastline offers “unrivalled” tidal resources to generate reliable power supplies free of the vagaries of sunlight or wind, Dunne said: “While we appreciate the government’s concern about the potential initial cost to the taxpayer to support early-stage tidal stream and tidal range structures, the benefits outweigh the costs. Support for tidal stream is likely to lead to a rapid fall in generating costs similar to, if not steeper than, the fall experienced in offshore wind. Tidal range projects are relatively cheap to maintain once the initial costs are paid off, offering – in the longer term – a potentially affordable contribution to make to the UK’s renewable energy mix.

“It is clear that there is a strong current of interest in tidal power, with clusters set to thrive around the UK, if it is given government backing. It is imperative that the government fully considers the benefits of this reliable renewable energy and have constructive discussions with the sector.”