Tidal turbines offered £20m of dedicated annual subsidies

The government has announced plans to make £20 million of dedicated annual subsidies available for tidal stream projects in the upcoming Contracts for Difference auctions.

The ring-fenced funding is in addition to the £265 million of yearly subsidies revealed in its draft budget notice in September.

The government said it will provide full details of the announcement in its final budget notice on Thursday (25 November). The fourth Contracts for Difference allocation round is due to start on 13 December and will offer guaranteed electricity prices for 15 years to up to 12GW of low-carbon generation capacity – more than the first three rounds combined.

Auctions will be held for three pots of technologies: one for more established technologies such as onshore wind and solar; another for less established technologies, including tidal stream; and a new third pot dedicated solely to offshore wind.

Business and energy secretary Kwasi Kwarteng said: “As an island nation we are perfectly placed to capitalise on clean marine energy, building on our booming offshore wind sector which is now a British industrial success story.

“We hope to see marine energy follow in the successful footprints of other renewable technologies, where we’ve seen costs fall dramatically in recent years thanks to UK government support.

“The investment today provides a major push for tidal power to become a key part of the next generation of renewable electricity projects needed to strengthen energy security as we work to reduce our dependency on volatile fossil fuels.”

Energy ministers Greg Hands added: “Our renewable energy auction scheme has been vital to the UK becoming a world leader in clean electricity generation and helping to bring down prices for consumers.

“Today’s dedicated backing for tidal stream power is opening up a new chapter for Britain’s coastal communities and advancing the possibilities for Britain’s marine energy sector to play a significant role in delivering the UK’s green industrial revolution.”

The announcement follows repeated petitions from the emerging industry and its proponents – the latest coming earlier this week – who warned that, without ring-fenced funding, tidal turbines would be outbid by more mature technologies and left unable to achieve similar cost reductions.

Renewable UK chief executive Dan McGrail said: “This is a major step forward for the UK’s world-leading tidal energy industry, allowing us to ramp up the roll-out of our cutting-edge marine technologies and increase the pace of innovation in the sector to become more cost competitive.

“Ring-fenced funding for tidal stream doesn’t just unlock private investment and secure green jobs today – it also puts us in pole position to capitalise on exports to the global market in due course. That’s why we’ve been calling for this dedicated pot of funding for tidal power.”

Sue Barr, chair of the UK Marine Energy Council, said: “The impact of this support cannot be overstated. Here in the UK, we have the knowledge, skills, people and projects to lead the world in marine energy, but we have been missing a vital piece of the puzzle to unlock investment and allow the sector to scale-up and deliver.

“The marine energy sector stretches the length and breadth of the UK – from the Isle of Wight to Orkney and Shetland.

She continued: “This dedicated ringfence will secure our domestic market, support decarbonisation and will enable tidal stream energy to develop; delivering export opportunities, green jobs, and economic growth in the process.

“We are grateful to ministers and the broader UK government for having listened, understood and acted.”

Earlier this month, tidal power pioneers Atlantis Energy and Nova Innovation joined forces to build out Atlantis’ MeyGen site in the Pentland Firth, where it has planning consent for another 80MW of tidal turbines on top of the 6MW it has already deployed and leasing rights for almost 400MW.