New report looks into policy support for cost-effective delivery of wave and tidal stream power
The University of Edinburgh’s Policy and Innovation Group has released a new report which quantified the specific policy support mechanisms, and the associated costs, that will be required to accelerate the wave and tidal stream energy sectors towards commercial deployment.
One of the primary challenges facing these technologies is the need to drive down the overall cost of energy generation and achieve cost parity with more mature renewable technologies and the wholesale market price, according to the Policy and Innovation Group.
This can be achieved in part through the targeted application of technology push and market pull policy support mechanisms, which can drive both sector innovation and market growth for wave and tidal stream energy devices.
By utilizing a number of future evidence-based scenarios, the report has evaluated the impact of both technology push and market pull policy support mechanisms, with a particular emphasis on the contracts for difference (CfD) scheme and the attainment of high technology learning rates.
It has also provided a forecast of the associated levels of investment required for the ocean energy sector to achieve parity with the wholesale market price of electricity and the requisite funding required at a national level to achieve the deployment of 6GW of wave energy and 6GW of tidal stream energy by 2050.
The report found that the continuation of sustained market pull funding support will be required, year on year, in order for the sector to maximize its full potential.
Also, despite the sector specific financial support offered to date, there remains a clear need for the UK government to provide technology push funding that targets both early and mid-stage technological innovation.
Increasing the technology learning rate, through targeted investment in technology innovation, applied as quickly as possible, provides the greatest overall cost reductions, significantly reducing the total investment required to support market pull polices such as the CfD scheme, according to the report.
In addition, it was found that an increase in the technology learning rate from 10% to 15% has the potential to reduce the total investment required for tidal stream from £18.6 billion (€21.7 billion) to £3.3 billion (€3.8 billion) and reduce the total investment required for wave from £20.5 billion (€23.9 billion) to £3 billion (€3.49 billion) when delivering 6GW of each technology by 2050.
Furthermore, working collaboratively with other leading European nations to target common challenge areas with regards to technological innovation can significantly reduce the overall time and financial investment required to achieve the learning rates required to accelerate the commercialization of the ocean energy sector, the report states.
Henry Jeffrey, head of the Policy and Innovation Group, said: “It is clear from this report that both wave and tidal stream have a key role to play in the UK achieving its net zero targets and our just transition commitments, while at the same time ensuring that the UK continues to have access to a secure, reliable supply of energy.
“It has also shown that sustained market pull policy, coupled with the optimal balance of innovation funding, will be vital for the wider sector to achieve its full potential and enable it to unlock a range of socioeconomic, energy system and environmental benefits.”
The report, titled ‘Ocean Energy and Net Zero: Policy Support for the Cost Effective Delivery of 12GW Wave and Tidal Stream by 2050’ is the fourth publication in a series outlining the policy mechanisms and innovations that will be required to unlock both the economic value and system benefits associated with commercial-scale ocean energy deployment, highlighting the role that wave and tidal stream can play in achieving net zero, driving the just transition and maintaining national energy security.
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