Memorandum 15
Submission from the South West Regional
Development Agency
1. EXECUTIVE
SUMMARY
1.1 The South West Regional Economic Strategy
identifies environmental technologies (including renewable energy)
as one of the eight priority sectors selected for specific intervention.
The South West RDA provides a variety of support to the renewable
energy sector and over the past few years has committed over £7.5
million to supporting the development, demonstration and commercialisation
of new energy technologies. Some of the major projects and initiatives
that the RDA has supported include the establishment and funding
of Regen SW, the region's renewable energy agency; grants for
research and development in emerging technologies; and the South
West Bio-heat Programme.
1.2 The most significant area of activity
for the South West RDA is in developing a marine renewable energy
industry, for which we are developing Wave Hub and an associated
economic support programme. The Wave Hub is an electrical "socket"
off the north coast of Cornwall to allow companies developing
wave energy technology to deploy groups (arrays) of devices in
a vigorous wave climate over several years. The project aims to
enable the final stage of development for companies in the UK,
taking advantage of the region's strong natural resource of wave
power, the existing skills and facilities in the marine sector,
and the research capability in universities and research institutes
to build a strong capability in marine renewables, consolidating
the UK's leading position in this area.
1.3 Wave Hub will enable device developers
to access a demonstration site without the cost and time commitment
of laying a cable and securing a consent. The developers will
be able to prove the performance of their devices and, at the
same time, form collaborations with industry and research centres
to improve the economics of their devices. It will work closely
with the DTI's Marine Renewable Deployment Fund and other grant
funded programmes, such as the Carbon Trust's Marine Accelerator
and various UK and European research programmes. It will also
provide a location for determining the environmental impacts of
the technologies and thereby influence stakeholders and affected
communities as well as informing decisions about the location
of future projects.
2. INTRODUCTION
2.1 The South West has a track record of
developing "firsts" in renewable energy. Among almost
100 renewable electricity schemes in the region is the UK's first
commercial wind farm and the first UK scheme to harness electricity
from fermented farm and food waste. The region has high levels
of wave, wind, hydro and solar energy and the best climate in
the UK for growing energy crops. It currently has 150 businesses
working in renewable energy and a number of individuals who lead
the world in renewable energy modelling, project development,
and device design and installation.
2.2 Recognising the South West's potential
to be a major force in the renewable energy industry and to make
a significant contribution to tackling climate change, the South
West Regional Economic Strategy has prioritised activity that
encourages new enterprises; helps the industry to compete in the
global economy; and promotes innovation. This will also help the
region to deliver on its statement of intent to secure economic
growth within environmental limits.
2.3 As a contribution towards unlocking
this potential in the South West's renewable energy sector, the
South West RDA has committed over £7.5 million to supporting
the development, demonstration and commercialisation of new energy
technologies over the last few years, and supports the renewable
sector in a number of different ways. Some of the major projects
and initiatives that the South West RDA has provided funding for
include:
— Regen SW—Regen SW acts as a
catalyst for the development of renewable energy in the South
West, with the objectives of increasing the amount of high quality
renewable energy projects on the ground; securing short-term growth
by supporting business in the renewable energy sector; and positioning
the region for long term economic growth by developing early leadership
in renewable energy technologies. Regen SW has had a number of
notable successes, and is currently delivering sector support
for the South West renewable energy industry.
— Grant for Research and Development—A
variety of renewable energy companies have received grants to
support their R&D, including a grant to help the development
of a 4000 kW wind turbine and a feasibility study for a tidal
energy device.
— SW Bioheat Programme—The South
West Bioheat Programme aims to stimulate the bioheat industry
in the South West through increasing the number of systems on
the ground, supporting fuel suppliers and providing recognised
training programmes across the region.
— Marine Renewable Energy Programme—The
South West region has a long coastline with many areas having
potentially commercial levels of energy for either wind or tidal
stream generation projects. To capitalise on this, the South West
RDA has developed a programme of activity to stimulate a world
class marine energy sector in the region.
2.4 It is our activity on marine renewable
energy that is the focus of the rest of this paper.
3. EARLY STAGES
OF THE
WAVE HUB
PROJECT
3.1 South West England wants to take a prominent
position in marine renewable energy, capitalising on its significant
potential to generate substantial amounts of electricity from
wave and tidal stream resources around its coast and ample, immediately
available, grid capacity. The South West RDA has long recognised
the potential of the marine energy industry for the region and
agreed to support demonstration projects in this sector.
3.2 In July 2003, the South West RDA invited
an expert industry panel, facilitated by Regen SW, to suggest
ways in which the region's wave resources could be exploited to
economic advantage. The panel considered a number of options,
including carrying out surveys to map resources and environmental
constraints and possible financial support mechanisms, but identified
the concept of developing a proving zone for wave energy devices
as the best option for the region to pursue. This would provide
wave device developers with a means of taking the next step towards
the commercial application of devices, and enable the future financing
of commercial projects.
3.3 In October 2003, the South West RDA
commissioned an initial report into the concept of developing
a Wave Hub. The Seapower South West report confirmed the likely
merits of this idea of developing a Wave Hub, based upon:
— the region's strong wave energy resource;
— capacity of the electricity distribution
network to accept substantial additional generation without major
investment;
— strength of the existing marine skills
base and available facilities;
— strength of the knowledge base including
universities and research institutes such as Plymouth Marine Laboratory,
the Marine Biological Association of the United Kingdom, the Met
Office, and the United Kingdom Hydrographic Office; and
— substantial grant support available
in Cornwall from the EU (Objective 1 and Convergence).
3.4 The South West RDA considered the industry's
advice, and the Seapower South West report and, in March 2004,
we agreed to develop Wave Hub further. Since this time, we have
kept in regular contact with the industry and are convinced that
this facility is critical if the UK is to retain its position
as the world leader in wave energy.
4. THE WAVE
HUB CONCEPT
4.1 Wave Hub is a groundbreaking renewable
energy project in the South West that aims to create the world's
first large scale wave energy farm by constructing an electrical
"socket" on the seabed around 10 nautical miles off
Hayle, on the Cornwall coast. 8 square kilometres of sea bed will
be leased from the Crown Estate and up to four companies developing
wave energy conversion devices (WECs) will be granted a 2 sq kilometre
area, within which to moor an array of devices. The devices will
then connect to the Wave Hub infrastructure on the sea floor and
up to 20MW of green power will be transmitted through a sub-sea
cable to the local distribution network at Hayle.
4.2 Each developer will be granted a lease
to use Wave Hub for between five and 10 years. The Wave Hub operator
will record climate conditions and the electricity generated by
each array. It will also monitor the environmental impacts the
arrays are causing. This will enable the developers to build up
a validated track record of performance that they can then use
to support proposals for commercial scale wave farms in the South
West and elsewhere.
4.3 The recording of environmental impacts
through research by the Wave Hub operator will inform stakeholders
and regulators and provide a basis for decisions about future
sites.
5. LINKAGES TO
OTHER UK INITIATIVES
5.1 The project will provide the final stage
of development for wave technologies in the UK. Early stage designs
can be tested at the established facilities provided by NaREC
in north-east England. Single prototypes, at part- or full-scale,
can then best tested at EMEC in Scotland. Wave Hub provides the
final demonstration stage before the devices can be deployed commercially.
5.2 The device developers deploying at Wave
Hub can expect to benefit from the Dti's Marine Renewables Deployment
Fund which offers capital support and a subsidy per unit of power
generated to developers who have already completed preliminary
trials at EMEC or similar facilities elsewhere.
5.3 The Carbon Trust's Marine Accelerator
Fund seeks to speed up the commercialisation of devices and the
Wave Hub will provide an ideal platform for many aspects of the
technology improvement they envisage.
5.4 Government, EU and commercial funds
are available for generic research and Wave Hub will provide the
opportunity to research many areas of concern to stakeholders,
regulators and communities. Of particular importance are effects
on fish stocks; impacts on marine mammals and sea birds; effects
on coastal processes, including shoreline waves used by surfers;
establishing procedures to ensure navigational safety and socio-economic
impacts.
6. CURRENT STATUS
6.1 Since 2004, the South West RDA has completed
studies into technical feasibility, the business case and economic
viability of the project, and has subsequently commissioned the
detailed design and an environmental impact assessment. Applications
for consent to construct were submitted to the Dti and Defra in
June 2006. Negotiations with stakeholders have now been concluded
and we understand that the Departments concerned will be determining
our applications within the coming weeks.
6.2 In April 2007, the South West RDA Board
resolved to go ahead with the project at a total cost (excluding
allowances for depreciation and use of capital) of £27.87
million. The Agency expects this to be part-funded by up to £11.75
million from the Cornwall Convergence programme and has received
a conditional offer from the Dti Marine Renewables Deployment
Fund of £4.5 million, making the net cost to the Agency of
£11.62 million. The costs of operating the project after
construction will be met by fees paid by the device developers.
The Board's decision is subject to various milestones being achieved
before the cable and equipment are ordered, including completion
of a site lease, consents being obtained and binding contracts
being entered into by at least two device developers. The investment
also has to be approved by the DTI and HM Treasury through the
Central Projects Review Group.
6.3 Subject to these requirements being
fulfilled, we expect to order the cable and equipment by the end
of 2007 and construct the project in 2008, or maybe 2009, depending
upon the lead times to obtain the cable and equipment and the
availability of cable-laying ships.
6.4 Four device developers have been selected
to work at the Wave Hub following invitations for expressions
of interest and interviews to determine their suitability in terms
of financial and managerial capability and the amount of testing
already completed. All four have completed some level of testing
in sea conditions and we are satisfied they have the capacity
to proceed with building an array of devices. The South West RDA
is working with this group to maximise the linkages with regional
and UK suppliers and facilitating their progress wherever possible.
7. FUTURE DEVELOPMENT
OF WAVE
ENERGY
7.1 Beyond Wave Hub, there are likely to
be opportunities for building commercial scale projects off the
South West coastline as well as export opportunities for the device
developers, their suppliers and knowledge-based consultancies.
7.2 Unlike offshore wind farms where fishing
can safely take place between individual turbines, wave farms
will need to exclude all fishing and other maritime activity because
of the presence of mooring lines and electrical cables. Development
of future sites will therefore require that areas of coastal sea
will be set aside for this purpose with other maritime activities
expressly excluded. This will require acceptance from commercial
shipping interests and leisure craft users that these areas will
be denied to them and that safety of navigation can be maintained.
Fishermen will see wave farms as a further constraint on their
activities. Coastal communities will be concerned to understand
any possible effects on coastal erosion, erosion of sand from
beaches and any adverse effects on waves used by surfers, an important
aspect of the tourist industry. Our environmental impact assessment
has predicted all of the latter to be negligible, but actual measurements
will prove or disprove this.
7.3 We expect that the Wave Hub will play
an important part in contributing to a greater understanding of
these factors and make a contribution to debates about coastal
policy and, in due course, marine spatial planning.
July 2007
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