A new report quantifies the specific policy support mechanisms, and the associated costs, that will be required to accelerate the wave and tidal stream energy sectors towards commercial deployment.
According to the Ocean Energy and Net Zero report, published by the University of Edinburgh, Supergen and UK P&I Club, one of the primary challenges facing these technologies is the need to drive down the overall cost of energy generation and achieve cost parity with more mature renewable technologies and the wholesale market price.
This can be achieved in part through the targeted application of technology push and market pull policy support mechanisms, which can drive both sector innovation and market growth for wave and tidal stream energy devices.
By utilising a number of future evidence-based scenarios, this report will evaluate the impact of both technology push and market pull policy support mechanisms, with a particular emphasis on the Contracts for Difference (CfD) scheme and the attainment of high technology learning rates.
It will forecast the associated levels of investment required for the ocean energy sector to achieve parity with the wholesale market price of electricity and the requisite funding required at a national level to achieve the deployment of 6GW of wave energy and 6GW of tidal stream energy by 2050.
Key findings
- The continuation of sustained market pull funding support will be required, year on year, in order for the sector to maximise its full potential;
- Despite the sector specific financial support offered to date, there remains a clear need for the UK Government to provide technology push funding that targets both early and mid-stage technological innovation;
- Increasing the technology learning rate, through targeted investment in technology innovation, applied as quickly as possible, provides the greatest overall cost reductions, significantly reducing the total investment required to support market pull polices such as the Contracts for Difference scheme;
- An increase in the technology learning rate from 10% to 15% has the potential to reduce the total investment required for tidal stream from £18.6bn to £3.3bn and reduce the total investment required for wave from £20.5bn to £3.0bn when delivering 6GW of each technology by 2050;
- Working collaboratively with other leading European nations to target common challenge areas with regards to technological innovation can significantly reduce the overall time and financial investment required to achieve the learning rates required to accelerate the commercialisation of the ocean energy sector.
Sustained market pull policy, coupled with the optimal balance of innovation funding, will be vital for the wider sector to achieve its full potential and enable it to unlock a range of socioeconomic, energy system and environmental benefits
… said Professor Henry Jeffrey, head of the Policy and Innovation Group
