Monday, February 20, 2012

MPs call for targets to help Britain rule the world's waves again

Marine Current Turbines' commercial-scale demonstration project with SeaGen in Strangford Lough in Northern Ireland
Marine Current Turbines' commercial-scale demonstration project with SeaGen in Strangford Lough in Northern Ireland. The shrimp MCT has just been swallowed by the Siemens' whale.
The UK could become a leading exporter of wave and tidal power equipment and expertise if the Government adopts a more visionary approach to developing marine renewables, according to a new report by the Energy and Climate Change Select Committee.

The MPs suggest giving targets to set the pace of development and show commitment, and suggest a cost target for marine energy of 14p/kWh by 2020.

Tim Yeo MP, Chair of the Committee, said that "We are extremely well placed to lead the world in wave and tidal technologies, which could potentially bring significant benefits in manufacturing and jobs, as well an abundant supply of reliable low-carbon electricity".

He called for "a more visionary approach from the Department of Energy and Climate Change" which "could help to boost confidence and drive the pace of development".

The UK is currently the world leader in the development of wave and tidal energy technologies. Of the eight full-scale prototype devices installed worldwide, seven are in the UK.

The country is lucky to have an abundant natural resource, along with Canada, France and East Asia, with the added advantage of a long history of academic research, world-class testing facilities and a strong skills base in other maritime industries.

The worldwide potential for power generated by tidal power plants is estimated at 800TWh a year, or about 3-4% of global power consumption.

Don't repeat mistakes

The MPs urge the Government not to repeat the mistakes that allowed the UK to lose its lead in the development of wind power. In the 1970s, it was a leader in the research and testing of wind turbines, but failed to establish a domestic manufacturing industry and missed out on many economic benefits.

By contrast, Denmark supported its wind power industry through the early adoption of Feed-in Tariffs and is now hosts the world’s largest supplier of wind turbines.

Those MPs with long memories may also have in mind a 1970s pioneering British wave power invention, Salter's Duck, whose development was allegedly sabotaged by Government officials prejudiced against renewable energy, by falsifying research results concerning its efficiency, leading to the cancellation of a £1m research project. This set marine power development back at least ten years.

"An overly cautious approach to developing the sector may allow other less risk-averse countries to steal the UK's lead," MPs warn.

The report recommends ways to maintain crucial investor confidence by maintaining policy certainty and sharing risk.

MPs also note the need to address other barriers to commercialisation such as grid connection, the consenting process, the need for better data on marine wildlife and public attitudes.

At the moment the industry is required to underwrite the cost of new grid connections. The committee report says that this places "an excessive burden on individual developers", as the cost is disproportionately borne, and suggest that either the Marine Energy Programme Board set up consortia that would shoulder this responsibility, or that the Government should underwrite some of the cost.

They also call for a simplification of a "complicated funding landscape" for marine renewables which leads to "overlaps and inefficiencies in the way the programmes are funded".

"The £20 million provided by DECC to underpin a world-leading industry is not large", they say, and so must be spent wisely.

They stop short of calling for more funding.

They also note a shortage of skilled scientists and engineers and want the Government to encourage more students into these disciplines now to take advantage of future opportunities.

On the investment issue, Martin McAdam of Aquamarin Power observed that "private sector investors can see the support available via Renewable Obligation Certificates until 2017, when they will be phased ou, but 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).

"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."

Ready for launch

A spokesman from DECC responded by saying that the Government is "fully committed to spurring on the growth of this industry", as the launch last month by Change Minister Greg Barker of the South West Marine Energy Park shows. He said there are plans to create similar parks in Scotland and Northern Ireland.

It's a time of exciting activity in the sector, but it is experiencing difficulty in finding investment partners in this country to help it take off.

Last week, Scottish tidal developer Marine Current Turbines (MCT) handed over boardroom control to German company Siemens, which bought a controlling stake in the company.

This world leader is already providing power to approximately 1500 households in a commercial-scale demonstration project with SeaGen in Strangford Lough in Northern Ireland, and has further projects at the planning stage, including the 8MW Kyle Rhea project in Scotland and the 10MW Anglesey Skerries project in Wales.

MCT needs investment and expertise to take it to the next stage of growth, and it evidently could not find a suitable British buyer.

Also north of the border, Alex Salmond is pinning hopes for Scotland's independence on success in the marine, and offshore wind, industry, which he believes will eventually let Scotland become an exporter of renewable energy and expertise, and he is securing partnerships in China and Abu Dhabi to help achieve this.

Wind developer Ecotricity has recently begun investing in a new kind of wave energy device called Searaser, which it believes will reach commercial stage before 2020, but both the developer and the investor in this case are British.

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