The British Wind Energy Association (BWEA), the UK's largest renewable trade association, released new research recommending urgent Government action to kick-start the UK's wave and tidal sector to ensure the country doesn't miss out on becoming world leaders. As the UK's major renewable energy association, BWEA has taken in ocean energy and tidal energy under its wings in hopes to extend their success to the nascent technologies.
The study, 'Into the Blue: Financing the Future of the Emerging Wave and Tidal Power Sector', has been undertaken by Climate Change Capital, a specialist merchant banking firm focusing on climate change and energy security, and examines the level and type of financial support that the sector needs to move it forward from its current research and demonstration phase.
Over forty five companies, organizations and individuals from the city, the utility sector, the wave and tidal industry and from within Government were interviewed over a two month period. The report recommends a series of actions that have been presented to Government over the past few weeks by the BWEA. Key conclusions are:Government financial support should focus on rewarding success and offer the tax payer best value for money The UK has a fantastic opportunity to become a world leader in the development and deployment of wave and tidal power. Most of the companies involved in the sector, including those not currently based in the UK, see the UK as the place to develop their businessesA £75 million Marine Performance Fund is proposed for the first 50 MW of wave and tidal projects and developers would obtain premium payments for a suggested five years following production of electricity. Given the right support framework, private capital will continue to be attracted to the sector removing the need for the Government to 'pick winners' through allocation of capital grants to companies in advance of deployment Government support in the form of capital grants for grid connection, decommissioning and consenting work should also be made available at a potential cost of some £40 million Continuation of capital grants at the research and development stage is also needed to bring through the next generation of technologies
The Government is close to finalizing its 2004 spending review plans and the total amount proposed by the study for allocation to wave and tidal amounts to some £130 million.
"While wind is key to delivering most of the 10% renewable target we need the emerging renewables, like wave and tidal, to begin to play a major role as soon as possible," said Marcus Rand, BWEA CEO. According to Rand, the Marine Performance Fund is a smart and innovative idea as it rewards the winners but doesn't ask Government to pick them in advance. "The tax payer will be rewarding successful projects and catalyzing the private sector to invest in the industry at this critical stage," Rand said. "If we get this right we will be taking the first steps in creating a world beating industry."
The proposals work with the grain of the market and represent a genuine breakthrough in thinking about how Government and renewable energy entrepreneurs can work together to build a low carbon economy for the UK, said Simon Roberts, Advisor to the project and Chair of the Government's Renewable Advisory Board's Finance Working Group. "This study has really got to grips with the issues for supporting these new technologies as they take the next vital steps towards commercialization." The 'Into the Blue' proposal is merely the first, albeit vital, step in the emergence of the UK marine renewables industry as a significant player in the UK power portfolio. The study therefore recommends that the Government state that future transitional support will also be necessary for a successful industry.