The Marine Energy Council responds to the UK Government's AR5 announcement

The Department for Energy Security and Net Zero (DESNZ) has today published the full parameters of the UK’s next renewable auction (AR5) and announced its plans to cut the tidal stream (TSE) ringfence from £20m to £10m. Sue Barr, Chair of the Marine Energy Council (MEC) has warned the ringfence reduction risks realising the UK’s TSE potential.

The UK Government demonstrated international leadership in setting the £20m tidal stream ringfence in Allocation Round 4 (AR4) of the Contracts for Difference (CfD) scheme. The industry responded strongly and the ringfence secured over 40+MW of TSE capacity, across four projects.

Today (March 16th 2023), the Government published the full parameters of AR5 and confirmed that the TSE ringfence will be reduced from £20m to £10m. A reduced ringfence will deliver fewer projects, increase the cost of project delivery, and risks the UK’s first mover advantage in marine energy.

An ongoing £20m ringfence would have delivered multiple projects across the UK, provided a clear investment pathway to drive down costs for consumers, and supported the industrialisation of the UK TSE sector, creating green jobs in coastal communities and beyond.  

In the Autumn Statement the Chancellor committed to a major acceleration of home-grown renewable technologies to support the UK reaching energy independence. TSE is an entirely predictable renewable firm power resource that will have a key role in displacing dependence on gas, reducing energy system cost, and creating a thriving industry that supports green jobs.

Industry is calling on the Government to maintain the £20m ringfence that was set in AR4.

"We welcome the UK Government's ongoing support for tidal stream. However, a reduced ringfence will deliver fewer projects and increase the cost of project delivery.

"Maintaining the £20m ringfence would have supported projects across the UK from the Isle of Wight to Anglesey, Orkney to Shetland.

“The industry shares the Government’s desire for TSE to take the same cost reduction journey as wind and solar. This will be achieved through deployment, which requires consistency from the policy environment.

"I hope the Government reviews today’s decision, retains the £20m ringfence as set in AR4, and works with industry to ensure the UK’s project pipeline is supported. This is necessary to realise the UK’s tidal stream potential and to unlock investment in coastal communities and beyond.”

Sue Barr, Chair of the Marine Energy Council

© UK Marine Energy Council (UKMEC)

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