Significant investment in wave and tidal could unleash a lucrative new force
Around the shores of Britain, a massive energy generator is ceaselessly turning over, day and night. It's inexhaustible, and it never fails. In theory, the sea – as it's better known – could give us all the electricity we need and more… If only we could work out how to harness it. Since 2004, grants worth a total of £42 million on offer from DECC's Marine Renewables Deployment Fund have been sitting around untapped, because no one could get any new technology to the stage where it would qualify. The Commons Select Committee on Energy and Climate Change talked of "five years lost" and called it "extremely disappointing".
The condition that companies failed to meet was three months' continuous, full-scale operation in the sea. It wasn't so much that this bar was set too high as that there was little financial assistance available to help anyone to clear it – and 'proving' devices in the sea is notoriously difficult and costly. Then, in 2009, as part of its huge fiscal stimulus package, the last Government came looking for things that would respond to a short, sharp shot in the arm. They knew that the green power market was certain to grow, and they judged that wave and tidal were a good bet.
And so they launched the Marine Renewables Proving Fund, administered by the Carbon Trust, with £22.5 million to disburse. The aim was to get the most mature projects to the point where they could qualify for a grant from the Deployment Fund. And the plan was to reduce the risk for private investors, by putting in up to 45% of whatever it would take to get there.
It was that rare thing: the right money aimed at the right target by some very astute civil servants, and it really got things moving. Despite the recession, it brought in some £40 million, mostly British, from utilities, private investors and venture-capital funds. That's really impressive, because this technology represents a considerable risk. Even if it works reliably (and survives everything nature throws at it), it may still prove not to be cost-competitive – and there is no way that it's going to compete with offshore wind (let alone coal and gas), straight out of the box.
The finance went to six projects: two to harness wave energy – the Pelamis floating 'snake' and Aquamarine's seabed-sitting 'oyster' – and four that are developing similar tidal turbines: Atlantis, Hammerfest Strøm, Marine Current Turbines and Voith (see 'New UK fund boosts wave and tidal'). All of them are potential winners.
The fact that this funding had to be spent within 18 months really concentrated minds. None of the money was wasted on duds or digressions. That's not to say that everything tried has been an instant success, but the problems encountered have been genuine ones, and valuable lessons – about hardcore physics, but also about the practicalities of testing machinery at sea – have been learned.
Britain is an obvious centre for marine energy. It has good exposure to the north Atlantic and an intricate coastline with lots of tidal streams – features that could make it the natural hub of the global market. There's the potential to generate considerable sums for investors, and create thousands of jobs.
Already, most of the leading technologies are being proved in the UK. What's needed now is a gradual shift from grant-based support to revenue. If all goes well, the first commercial-scale farms – which will generate power, save carbon and make some sort of return – are likely to be in the water by around 2015.
The new Government may not believe in Keynesian economics, but it has pledged specifically to support the development of wave and tidal power – and the private sector has shown its readiness to respond.
Richard Boud is an Associate Director at Entec UK.
Image credits: Jcrosemann / istock