Great British Energy Bill

 Written evidence submitted by the UK Marine Energy Council to the Great British Energy Bill Public Bill Committee (GBEB23)

Great British Energy: Sea Power

Proposal

· Commit £250m (3%) of Great British Energy’s budget to accelerate deployment of, and embed UK content in, marine energy projects deployed here and around the world.

Background

The UK has the offshore engineering expertise and natural resources to lead the world in harnessing the power of tidal streams. Three consecutive ringfences in the Contracts for Difference mechanism has secured an unparalleled project pipeline with 120MW contracted to be deployed before 2029. This is an important, but small, first step to realising the UK’s 11+GW of tidal stream energy potential. [1]

Tidal stream projects are being deployed with upwards of 80% UK supply chain content spend. This is significantly higher than other renewable technologies. GB Energy should seek to accelerate deployment of, and embed UK content in, projects installed here and around the world. However, high capital costs and long investment return profiles are currently hindering the sectors progress to secure adequate volumes of finance and a move towards large-scale construction.

Great British Energy: Sea Power (GBESP) will take equity stakes under commercial terms in projects that have secured a CfD, bringing them to FID and into construction, helping to create essential momentum in the progress of the emerging tidal project pipeline. These projects will deploy during this Parliament, ensuring GB Energy has a visible and tangible impact for constituencies across the UK.

Support the UK becoming a Clean Energy Superpower

By taking an equity stake in projects committed to maintaining high levels of UK supply chain content, GB Energy will support the UK lead the world in marine energy and becoming a Clean Energy Superpower. Via investing alongside private debt and equity investors to derisk initial projects, GBESP will stimulate multiples of its own investments into the supply chain across the UK, ensure the benefits of tidal stream are secured and shared, whilst positioning the UK to benefit from a global export market that is forecasted to deliver over £17bn Gross Value Added to the UK economy. [2]

Create jobs across the UK

GBESP will require due diligence processes to ensure that investment is directed alongside private finance into projects that deliver value for UK taxpayers, billpayers and communities. The commitment to UK content will position communities across the UK to benefit from the tidal stream opportunity. As noted in a recent study from the LSE, "with a sizeable domestic renewable resource with high predictability, tidal stream energy has the potential to contribute to sustainable economic growth in the UK, enhancing net zero efforts, improving energy security and generating jobs across the country." [3]

Make GB Energy’s budget go further

Setting the target investment budget at £250m provide sufficient capital for GBESP to invest in multiple marine energy projects to support the development of the UK’s marine energy sector, including wave energy. After a project is deployed it is envisaged that GB Energy will divest its project stake, profiting on its investment and recycle this into new marine energy projects and opportunities.

Great British Energy: Sea Power will:

· Support the UK lead the world in deploying and exporting an entirely predictable renewable technology.

· Embed UK content in projects deployed in its seas and around the world.

· Deliver value for money and secure opportunities for UK households and communities.

· Provide a visible example of the impact of GB Energy delivering a popular renewable industry. [4]

· Provide a positive signal to private investors and help to crowd in finance.

October 2024