Wave and tidal stream energy (marine renewables) have the potential to benefit the UK: there is an abundance of resource (potentially enough to supply 20% of current electricity demand); they can provide a more reliable and predictable source of energy than some other types of renewables; they could help cut carbon emissions; and they could provide new jobs and industries. As the current world leader in the development of marine renewables, the UK could also benefit by exporting goods and skills as other markets begin to emerge around the world. The UK should follow the example set by Denmark in the 1980s in establishing a domestic wind power industry. Adopting a similar vision for a marine industry in the UK could help to accelerate development in the sector and to secure benefits for the UK.
Attracting investment will be key to the development of marine renewables technologies. Investors want a stable and consistent policy regime to give them confidence to invest. They also need to have confidence that there is a long-term, viable market for the technology that they are backing. Market signals through revenue support schemes like the Renewables Obligation are one way of providing this. Investors are unwilling to take on excessive risks. Splitting the costs between the private and public sectors may help to reduce risks, as could addressing practical barriers (such as a lack of grid connections).
Marine renewables are part of a much larger landscape of low-carbon energy technologies, which includes nuclear and carbon capture and storage as well as other types of renewables, they could play an important role as part of a low-carbon energy mix in the future. But their very high cost at their present state of development means they are unlikely to make much, if any, contribution before 2020. The priority over the next decade must be to focus on reducing the cost of marine renewables. The Government should clearly set out its expectations of industry in this regard so that progress can be monitored. If cost reductions are delivered successfully, more ambitious plans for the deployment of marine renewables can then be adopted.
Potential obstacles fall into three categories: bureaucratic, financial and practical. Many organisations are involved in providing funding and support to the sector. A more streamlined approach may reduce duplication and inefficiency in funding schemes. The formation of the Low Carbon Innovation Group is a step in the right direction, but we would like to see further action to simplify the funding landscape. We also hope that the Department will minimise bureaucracy for applicants to the £20m fund that is available for testing arrays, potentially by developing a joint pre-qualification process with the £18m fund that is available from the Scottish Government.
The proposal to increase revenue support to five Renewables Obligation Certificates (ROCs) per MWh has been widely welcomed by the industry and it will encourage investors. However, there is still a great deal of uncertainty about the level of revenue support that will be provided beyond 2017 and how levels are likely to change over time. The Department must provide clarity on these matters as soon as possible. It must also consider how to prevent costs to consumers beyond 2017 from becoming excessive.
Practical obstacles include access to grid connections, the planning and consenting process and accessing a suitably skilled workforce. It is important to address these issues now to ensure that the development of the sector is not blocked in the future. Gaining acceptance from members of the public is also important .
Although it is still early days for marine renewables, the potential longer-term benefits associated with developing a thriving wave and tidal industry in the UK are significant. An overly cautious approach may allow other countries to steal the UK's lead. It is vital that DECC continues to support the development of these technologies so that the UK can retain its leadership position.