Tidal stream (TSE) will be significantly cheaper than new nuclear at 1GW of deployment and could fall below £50/MWh according to new research by the Offshore Renewable Energy (ORE) Catapult.
The research, produced as part of the Interreg FCE funded TIGER project, has found that economies of volume, scale and accelerated learning will all contribute to the Levelised Cost of Energy (LCOE) of tidal stream reducing from £260/MWh today to £78/MWh by 2035.
Cost reductions will follow a similar path to other renewables including wind and solar and with the right policy environment could reach below £50/MWh by 2050.
The report follows the success of tidal stream technology in Allocation Round 4 of the Contracts for Difference scheme, where 4 projects successfully bid to deliver 40MW+ of tidal stream capacity at £178/MWh. The report notes that this represents a 40% reduction in LCOE from levels in 2018, despite little to no revenue support.
TSE provides entirely predictable, renewable firm power to energy systems. This will become increasingly important in the transition to net zero which will become increasingly dependent on intermittent renewables like wind and solar. That TSE is decoupled from wind and solar supports energy security and can displace current dependence on fossil fuels for when the sun isn’t shining, or the wind isn’t blowing.
In addition to the clear LCOE cost reduction pathway, the report gathers current understanding of the broader socio-economic benefits of TSE to the UK economy, including:
The creation of 45 jobs per MW deployed.
Projects being delivered with over 80% of materials from UK supply chains.
Contribute £17bn per annum in Gross Value Added (GVA) to the UK economy.
The report makes three key recommendations and actions for the UK Government to undertake to realise its TSE potential:
Committing to industry deployment targets. The ORE Catapult has endorsed the Marine Energy Council’s (MEC) recommendation for the UK Government to commit to a target of 1GW of marine energy by 2035.
Ensure TSE has secure route to market. The report calls for the UK to maintain the TSE ringfence in upcoming Contract for Difference auctions.
Streamlining the consenting process. Reducing approval times to one year, as is being pursued for offshore wind in the UK, will strengthen the project pipeline and ensure that the next generation of projects are built.
This report presents a cost reduction trajectory for the tidal stream energy industry and an effective way to track progress over the next 15 years. It allows technology providers, policymakers, and investors to see how the industry has evolved, and how tidal stream can make a significant contribution to energy security in the future. The sector has never been stronger and the roll out of tidal stream energy is a huge opportunity we must capitalise on.
The UK has the maritime expertise and rich tidal resource to be a world-leader in the development of the TSE sector. The UK Government took an important first step in setting a TSE ringfence in the last renewable auction. It is critical that this report’s recommendations are implemented to support a secure and cost-effective transition to net zero and unlock predictable renewable firm power.
The Cost Reduction Pathway of Tidal Stream Energy in the UK and France report can be dowloaded from the ORE Catapult website.