A report from the Select Committee on Energy and Climate Change said government needed to take a number of actions to boost confidence and accelerate the pace of development, including setting deployment targets, and splitting the cost of development between the public and private sector.
The report was prompted by the UK Government’s decision to close the £50 million Marine Renewables Deployment Fund and replace it with a £20 million innovation fund.
Citing the UK’s current success as a world leader marine energy – 7 of the 8 full scale prototypes deployed globally are in the UK - the report highlighted the economic benefits on offer if the UK maintains its lead, including the export of devices, components and expertise. Furthermore, the marine energy could in future supply up to 20% of the UK’s electricity supply. The report was especially timely, given that Siemens has thrown its hat into the wave and tidal arena - having announced its intention to acquire a majority stake in the UK tidal power company Marine Current Turbines Ltd.
But despite the Siemens/MCT deal, MPs on the committee warned that an overly-cautious approach could lose the UK its world-leader status in marine energy to more ambitious nations, risking a repeat of the 1980s, which saw the UK lose its lead in wind turbine testing to Denmark.
The committee’s chairman, Tim Yeo, said: “A more visionary approach from the Department of Energy and Climate Change could help to boost confidence and drive the pace of development."
He added: "In the eighties the UK squandered the lead it had in wind power development and now Denmark has a large share of the worldwide market in turbine manufacturing. It should be a priority for the Government to ensure that the UK remains at the cutting edge of developments in this technology and does not allow our lead to slip."
According to the Select Committee, which offers Parliamentary advice to ministers and their departments, the UK is well-placed to exploit its lead, should it choose to do so. The UK has an estimated wave and tidal stream energy resource of around 71 TWh/year, as well as established marine testing facilities and a strong skills base in other maritime industries.
In order to cement the UKs lead, the committee said, the Government should consider setting ambitious deployment targets to 2020, beyond the 300MW by 2020 predicted in the government’s renewables roadmap, and address practical barriers such as a lack of grid connection, which would send strong political signals in favour of marine renewables. Investor confidence, which will be crucial in developing the industry, would also be boosted if ministers split the risk between public and private investors, the committee added.
Martin McAdam, chief executive of Aquamarine Power, which is planning to deploy a 2.4MW wave power array in Orkney, called for a long term tariff for marine energy to be finalised. The current tariff, the Renewables Obligation, expires in 2017 and firm details on its replacement, the feed-in tariff, have yet to be decided.
“Private sector investors, and they are out there, can see the support available via Renewable Obligation Certificates until 2017, when they will be phased out,” said McAdam. “Beyond that, the view is unclear. The critical enabler for our industry will be the long-term signal of a suitable marine energy feed in tariff (FiT).”
He added: “The shift from ROCs to FITs has already unsettled potential investors, and what we need now is a stable tariff that will stay in place, and not be tinkered with for a number of years.”
Meanwhile, Martin Murphy, managing director of Welsh tidal developer Tidal Energy Limited warned that the industry needs a consistent tariff system across the UK. “As a developer based in Wales, we also urge the government to promote a UK wide policy strategy to stimulate growth in the industry,” he said. “It is essential that we maintain parallel subsidy regimes for instance, if we are to ensure that the benefits are felt across the entire of the UK, reinforcing our position as the world leader.”
See our 3 part feature: Countdown to 2020: can the UK meet its renewables targets?
Part 1 - Is the UK on the right path to achieving its legally binding targets?
Part 2 - What are the main challenges the UK faces in reaching 15% renewables by 2020?
Part 3 - What is the industry’s role in the UK’s path to15% renewables by 2020, and what happens to 2030 and beyond?