The UK government will invest £20 million per year in Tidal Energy
The UK government is backing tidal energy as part of its flagship renewable energy auction scheme, announcing today its biggest investment in a generation into tidal power. The UK government will invest £20 million per year in Tidal Stream electricity as part of its flagship renewable energy auction scheme, kickstarting a brand-new chapter for the tidal industry and creating jobs across the UK. Today’s announcement (24 November 2021) will unlock the potential for the emerging tidal power market.
AR4 – Contracts for Difference Scheme
As part of the fourth allocation round of the Contracts for Difference Scheme due to open next month, the UK government will ensure that £20 million per year will be ringfenced for Tidal Stream projects, giving the marine energy sector a chance to develop their technology and lower their costs in a similar way to the UK’s world-leading offshore wind industry. This will bring the total funding for this allocation round to £285 million per year.
Effects of this support mechanism: LCOE down
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%. Over time marine technologies have the potential to significantly contribute to our decarbonisation commitments and will supports hundreds of green jobs across the country, with projects currently in development in North-West Scotland, North Wales and the Southern coast of England.
Further details are not yet available but the headline is, assuming all other elements of the CfD framework remain unchanged, that £20m at the administrative strike price of £211/MWh enable the support of the installation of 34MW. This number is based upon an analysis performed by Gavin Smart, ORE Catapult’s Head of Analysis & Insights
You can find the complete story here: Press release