The UK government has announced that it will invest £20 million ($27 million) per year in Tidal Stream electricity as part of its Contracts for Difference renewable energy auction scheme.
The aim of the investment is to unlock the potential of tidal power to decarbonise the energy system and to support the development and scale-up of marine technologies.
History has illustrated the effectiveness of the scheme’s design in keeping costs down – between the first allocation round in 2015 and the most recent round in 2019, the price per unit (MWh) of offshore wind fell by around 65%.
Tidal energy can be a very reliable source of generation, due to the predictability of the tides. According to the UK government, including this in the UK’s energy mix will make it easier to match supply with demand, and will further reduce the reliance on fossil fuels and exposure to volatile global gas prices.
Business and Energy Secretary Kwasi Kwarteng said: “As an island nation we are perfectly placed to capitalise on clean marine energy, building on our booming offshore wind sector which is now a British industrial success story.
“The investment today provides a major push for tidal power to become a key part of the next generation of renewable electricity projects needed to strengthen energy security as we work to reduce our dependency on volatile fossil fuels.”
Full details of all Contracts for Difference scheme announcements will be released this week, where the government will outline plans to launch its largest Contracts for Difference (CfD) allocation round, with a total budget for the fourth allocation of £285 million ($380 million) per year.
This fourth round of the Contracts for Difference Scheme will open on 13 December 2021.
Scottish Secretary Alister Jack said: “This UK government allocation of funding for the tidal industry in Scotland, and across the UK, is tremendous news. Harnessing the powers of our seas is a vital step in our transition to the use of greener, cleaner energy and underlines the UK government’s commitment to create and protect highly-skilled jobs while on our journey to net zero by 2050.
“With strong wind and solar power industries in the UK it is the natural next step to explore our tidal energy capabilities. It’s an exciting development in supporting of our domestically-produced renewable energy sources.