The French company Naval Energies has announced that it will stop investing in the field of tidal turbines, instead placing its focus on floating wind turbines and marine thermal energy conversion. Despite the company’s recent investment in a tidal turbine project in Canada, it says that the lack of commercial demand means that it must redirect its focus.
The announcement underlines the difficulties the tidal stream industry is facing and follows the UK government’s recent decision to reject funding for the tidal lagoon power plant in Swansea, saying that the £1.3bn development price was not cost-effective. Business Secretary Greg Clark said at the time that “no individual project, and no particular technology, can proceed at any price”.
Earlier in the year, Catapult (the research centre for offshore renewable energy) reported there is significant potential to reduce the cost of tidal stream, from approximately £300/MWh today to less than £90/MWh within deployment of 1GW. However, the initial funding required to reach that point has proven too high. High costs stem from the extensive engineering work required to build a tidal lagoon plant and connect it to the grid. As an island, the UK is ideally placed to utilise marine energy, but marine energy is in competition with a wide range of other renewable technologies.
The UK has seen success in renewable deployment, with 30% of the energy mix delivered by renewables in Q1 2018, which is because we are now seeing the benefits of investment decisions taken since 2008. However, evidence shows that new investment in renewables has fallen since support regimes were reduced in 2015. According to figures from Bloomberg New Energy Finance, clean energy investment in the UK fell by 56% in 2017. Although it should be noted that reduced investment levels can also be attributed, partially, to the falling costs of many renewable technologies.
Energy minister Claire Perry has recently announced that Contracts for Difference auctions will be held in 2019 and every two years after that, with the parameters to be published later in the year. Referring to a strike price of £57.50/MWh for offshore wind, which would have been unimaginable a few years ago, the government believes the auctions could bring 1 to 2 GW of new offshore wind every year in the 2020s.