Tidal stream and FLOW at the forefront of near-term economic opportunity for Wales, report finds

Marine Energy Wales has released its annual ‘State of the Sector Report’ which dives into the opportunities and economic benefits of the developing marine energy sector in Wales.

Set against the backdrop of increased revenue support, the UK’s net zero challenge and the rising energy cost and security crises, the marine energy sector faces a revitalized sense of confidence, according to Marine Energy Wales.

With a target set for the floating offshore wind in the Celtic Sea, a tidal power demonstration zone under construction off the coast of Anglesey and the first UK Government contract awards granted for marine developers, the tide is now turning on the future benefits from ocean power, the organization said in its ‘State of the Sector Report’ for 2022.

In addition to presenting the latest figures for the level of investment in Wales, the report also gathers and presents data in additional areas.  Most notably the type of employment being generated by the sector, alongside the projected growth in spending over the next five years.

Martin Murphy, non-executive chair of Marine Energy Wales, said: “The last year has seen many challenges for society at large. Whilst now hopefully at the tail end, the global pandemic has continued to cause economic challenges across all sectors. The energy industry has been heavily impacted by Russia’s invasion of Ukraine. In spite of these pressures, our sector continues to demonstrate its resilience as well the role it must play in reaching net zero targets, energy security and bringing high value jobs to coastal communities.”

The report shows that the sector continues to grow, albeit with a slight slowdown in rate. Unlike previous years, the 2021/2022 financial year did not experience record growth, according to the report.

University research dominated spending and supply chain investment grew rapidly, most likely in anticipation of a burgeoning project pipeline that now has some certainty behind it thanks to government targets and policy.

Anglesey has seen the largest amount of investment of any Welsh county, due to the large amount of tidal stream activity in the area, while Pembrokeshire currently sees the highest employment associated with the sector, due in part to the large established supply chain cluster around the Port of Milford Haven.

While only a small number of projects have been built and deployed to date, construction provides the most employment within the sector, the report has found. This underscores the large-scale jobs benefit of establishing Wales as a manufacturing hub for marine energy as regional, national and international project pipelines grow.

Cumulative investment and spend in Wales by the marine renewable energy sector now amounts to £159.6 million (€184.6 million), an increase of £13.7 million (€15.8 million) on last year

Research across Wales’s universities and academic institutions accounts for the largest portion, with a combined spend of approximately £4.6 million (€5.3 million) in 2022.

Tidal stream is the second biggest contributor to this year’s spending and investment, with a combined total of £3.8 million (€4.4 million). Much of this is attributed to the further development of the Morlais tidal demonstration zone and technology developers looking to deploy to this zone, including (but not limited to) Nova Innovation, Orbital Marine Power and QED Naval.

Wave and floating platform technologies saw a total spend of £1 million (€1.15 million). This is due to the combined efforts of two companies, Marine Power Systems and Bombora Wave Power, who are both currently progressing full-scale demonstration projects harnessing wave power and floating platform designs to integrate their technology with the emerging floating offshore wind market.

Looking ahead, both tidal stream and floating offshore wind represent a similar level of economic opportunity for Wales over the course of the next five years, with both technologies bringing benefits to different regions of the country.

The projections made in the report are based on Marin Energy Wales’ members input about their level of projected spending in Wales over the next five years. These projections are based on current market activity and operate under the assumption of a continuation of project pipelines.

Of note is the similarity in projected spend for tidal steam and floating offshore wind (FLOW), with an estimated £192 million (€222 million) and £193 million (€223.2 million) respectively. Tidal stream and FLOW can therefore be considered parallel in terms of the level of near-term economic opportunity, according to Marine Energy Wales.

Further homegrown development and deployment of both technologies should be pursued with equal weight to maximize the benefits, it is stated in the report.

Also of relevance is the geographical spread for these two technology types. Much of the country’s tidal stream activity is centered around the island of Anglesey in Northwest Wales, whereas floating offshore wind activity is clustered in the Southwest close to the Celtic Sea. These technologies will therefore deliver economic benefits to different parts of the country, the report concludes.

There is also a large projected outlook for integrated wave and floating platform technologies, with an estimated five year spend of £110 million (€127.2 million). As well as maximizing power generation from a single site, thereby lowering the levelized cost of energy, these technological developments offer significant economic potential given Wales’s early mover advantage in this area.

As for the existing supply chain, the projected five-year growth of £45.8 million (€53 million) is derived from the supply chain companies currently working and active in the sector. This does not account for additional companies that may diversify into the sector in the future.

“Whilst this industry is still nascent, and we are yet to see large scale deployment of marine renewable technologies, government backing means we are now on the cusp of this becoming a reality. Already we can point to a diverse range of meaningful careers the sector can create and maintain, and employment opportunities in the sector are set to grow exponentially,” said Jay Sheppard, project manager at Marine Energy Wales.

If all the projections featured in the report are realized, the marine energy sector could deliver an estimated £603.3 million (€697.6 million) in economic benefits to Wales over the course of the next five years, roughly four times what has been delivered by the sector to date, it is concluded in the report.

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