Private Markets Will Unleash Wave of Tidal Energy – GRI LSE
The UK has the opportunity to become a world leader in the emerging tidal stream technology, according to GRI LSE.
New research has underlined the importance of the UK government providing policy certainty to private investors to incentivise investment in domestic tidal stream energy projects, which are seen as pivotal to the country’s net zero transition.
“Tidal stream energy can offer the UK’s energy system benefits that solar and wind can’t, mainly because it is so predictable, as we know when the tides are going to hit,” Esin Serin, Policy Analyst at the London School of Economics Grantham Research Institute on Climate Change and the Environment (GRI LSE), told ESG Investor.
The technology is especially appealing to islands, which can capture energy from the rise and fall of oceanic tides along their coastlines through underwater turbines propelled by the currents to power a generator. The other predominant form of tidal technology involves tidal barrages, which operate as hydroelectric dams.
“Tidal stream energy could be hugely important to the UK’s climate transition plan, as well as ensuring energy security,” Serin, also lead author of the GRI LSE report, added.
She warned that the full potential of this still nascent technology will only be realised with increased private investment.
The report outlined a series of recommendations for the UK government to grow the domestic tidal stream energy market. These recommendations include publishing an explicit statement of government ambition in tidal stream energy to help drive private sector investment into the domestic supply chain and the delivery of the technology at scale across the UK.
“There is limited imperative for the private sector to invest in growing the UK supply chain for tidal stream energy without explicit support from policy,” the report said.
This stated ambition could be in the form of a domestic deployment target in gigawatt terms and a clear timeline, it added.
The GRI LSE report has estimated that the UK currently has just 10 megawatts (MW) of tidal stream generation capacity installed, which represents over half of the world’s operational capacity.
However, research by Plymouth University indicated that tidal stream power has the potential to deliver 11% of the UK’s annual electricity needs.
Market research and consulting firm Polaris noted that the global wave and tidal energy market was valued at US$527.7 million in 2021 but is expected to reach US$4.5 billion by 2030.
The UK’s Contracts for Difference (CfD) scheme must also continue to be utilised to scale up tidal stream technologies, the report said, adding that “a continued ringfencing approach […] can accelerate deployment and catalyse drivers of cost reduction for the technology, as previously seen in offshore wind”.
RenewableUK, which supports over 400 member companies working to upscale the deployment of renewable electricity across the country, previously wrote to the government calling for CfD auctions to be “calibrated to support tidal stream development”.
“In previous CfD auctions, tidal stream generators have had to compete for contracts against mature technologies like offshore wind which, following substantial periods of revenue support for multiple governments, can currently provide electricity at a lower cost,” RenewableUK said.
Last year, government-backed research centre Offshore Renewable Energy Catapult, said the cost of generating power from tidal streams could fall below nuclear energy in a little over a decade.
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