UK: Marine industry calls for ‘right support’ post Swansea ruling
- Business & Finance
The representative organizations for the UK marine energy sector, as well as their European counterpart Ocean Energy Europe, have expressed their disappointment on the Swansea Bay tidal lagoon rejection and called the UK government to chart clear and viable route to market for tidal and wave industries in the country.
Trade body for offshore wind, tidal and wave – RenewableUK – has expressed disappointment at the government’s decision not to proceed with the 320MW tidal lagoon project in Swansea Bay.
RenewableUK’s Chief Executive Hugh McNeal said: “This decision is deeply disappointing and shows a lack of vision. Tidal lagoons have massive potential to meet our national energy needs and create jobs, as well as bringing industrial-scale economic benefits to the UK – including opportunities to export worldwide. The review commissioned by the Government on this innovative technology found that it can deliver secure power at a price that’s competitive in the long term.
“The UK’s future energy mix will be powered by a range of low carbon technologies. We know that with the right support, tidal energy can quickly become competitive on cost with other renewable and low carbon power like nuclear.”
The Director of RenewableUK Cymru – the Welsh branch of the parent organization – David Clubb, said: “This means that the region will not benefit from many thousands of jobs from the project and the associated supply chain. The loss in skills, supply chain and economic activity to Swansea, the region, to Wales and to the UK is colossal.
“It means that the pathfinder project, described as being a ‘no-regrets’ decision by an independent review, which could have led to a whole series of projects across Wales with benefits UK-wide, will have to seek another mechanism of financial support, or will not go ahead.”
Marine energy sector needs clarity from the UK government
The Welsh marine body – Marine Energy Wales – said the decision would undoubtedly stall progress on the Swansea Bay project, and the the wider marine energy sector needs clarity from UK government.
David Jones, Project Director at Marine Energy Wales said: “Along with the other devolved nations Wales views tidal range, stream, and wave as maritime economies where we can build world leading industries and export into growing global markets. Marine energy will follow the cost reduction seen in offshore wind, with companies and communities benefitting from a new blue economy.
“With Brexit on the horizon it is more important than ever that the UK Government realizes and responds to the regions that have prioritized these low carbon emerging markets.”
Responding to the decision from Scotland, Senior Policy Manager at Scottish Renewables, Hannah Smith, said: “While this project will not go ahead, it’s crucial to remember that the UK maintains a world lead in developing wave and tidal energy.
“These sectors in Scotland are at the forefront of marine energy innovation, with a number of significant achievements over the past 12 months, helping drive the cost reductions which will assist them to fully commercialize.
“Wave and tidal developments have a vital role to play in boosting rural economies and contributing to both our energy ambitions and Industrial Strategy.
“However, all of this is at risk with the lack of a clear and viable route to market for tidal and wave technologies in the UK.
“We would strongly encourage both the Scottish and UK Governments to continue working with industry in order to determine the best way for our wave and tidal sectors to reach their full potential.”
UK government should seize its tidal energy opportunity
Ocean Energy Europe regrets the UK government’s decision not to include tidal lagoons in its energy mix, the organization said.
Without revenue support, the Swansea Bay Tidal Lagoon will simply not go ahead and the UK will lose out on the many benefits it can bring – jobs, growth, industrial leadership and more, the organization has said.
Despite this decision, the industry is awaiting clarity from the UK government on whether other emerging renewable technologies such as tidal stream and wave energy are to be developed in the UK.
To secure its global advantage in those technologies, and create a route to market, visibility on prices and volumes ‘at home’ is badly needed, said Ocean Energy Europe.
Rémi Gruet, CEO of Ocean Energy Europe said: “The benefits of tidal lagoons were well recognized, the cost of support comparatively cheap, and the long-term perspective very promising. Today’s decision is therefore regrettable.
“The UK government should now make sure it doesn’t miss out on other emerging technologies such as tidal stream or wave energy. The UK is the global leader in tidal stream, and the world’s most advanced projects are generating electricity in UK waters today.
“To push those towards commercialization, an “Innovation PPA” scheme for the early demonstration phase, as well as a ring-fenced CfD for more advanced projects, should be put in place. Revenue support is the only way for the UK to transform technology leadership into market dominance and build a new manufacturing industry, based in Britain.”
The issue here is specifically with the tidal lagoon application, not the concept of marine energy itself, says Welsh Secretary of State
Welsh Secretary of State for Wales, Alun Cairns, said the consumer and industry would have been paying disproportionately high prices for electricity in the case of a positive decision for the project – all at the same time when cheaper alternatives are available.
Cairns said: “I realise the disappointment this decision may cause, but ultimately this project did not meet the threshold for taxpayer value.
“I was an early and consistent supporter of the scheme – and took it to Number 10 – but after months of hard work by officials – the conclusion when taking a responsible approach to taxpayers money – is it just did not stack up.
“It’s important to stress that the issue here is specifically with the tidal lagoon application, not the concept of marine energy itself. The Office of the Secretary of State for Wales and wider Government is committed to renewable energy and we will remain open to different sources of that. However, the priority always has to be that renewable energy represents good value for the Welsh consumer.”
Greg Clark, the UK energy secretary, said the government still believes in renewable energy and in the benefits of innovation, without making any comments regarding the support for the wider marine energy sector in the UK.
Making the announcement that the UK government will not back the project, Clark said:
“The inescapable conclusion of an extensive analysis is that however novel and appealing the proposal that has been made is, even with these factors taken into account, the costs that would be incurred by consumers and taxpayers would be so much higher than alternative sources of low carbon power, that it would be irresponsible to enter into a contract with the provider.
“Securing our energy needs into the future has to be done seriously and, when much cheaper alternatives exist, no individual project, and no particular technology, can proceed at any price. That is true for all technologies.
“The fact that this proposal has not demonstrated that it could be value for money does not mean that its potential is not recognized.
“My department is also in receipt of proposals from other promoters of tidal energy schemes which are said to have lower costs than the Swansea proposal, although these are an earlier stage of development.
“Any proposals must be able credibly to demonstrate value for money for consumers and public funds.”