2016 has been another active year for the ocean energy sector in the United Kingdom (UK). Several significant and internationally relevant developments have been made across the wave, tidal stream and tidal range segments, while the political and regulatory setting for the sector has continued to evolve. The promise of ocean energy remains strong and there is potential for wave and tidal energy to contribute significantly to the UK’s electricity supply in the run up to 2050, subject to reducing costs and achieving competitiveness with alternative technologies.
SUPPORTING POLICIES ON OCEAN ENERGY
NATIONAL STRATEGY AND TARGETS
A restructuring of government departments in 2016 led to the Department for Energy and Climate Change (DECC) being absorbed into the new department for Business, Energy and Industrial Strategy (BEIS). BEIS retains overall responsibility for energy policy in the UK although many powers related to energy have been devolved to the governments of Scotland, Wales and Northern Ireland.
The UK government continues to offer revenue support to a variety of renewable energy technologies through the Contract for Difference (CfD) programme. Based on a “strike price”, CfDs offer long-term price stabilisation and are awarded via competitive auctions. The next round of auctions, worth £290m per annum, will open in April 2017. Strike prices of £310/MWh for wave and £300/MWh for tidal stream are being mooted for projects due to deploy in 2021/22. However, bids for wave and tidal stream CfD allocations are made in competition with other “less established technologies” in a pot of that includes offshore wind and biomass.
UK Contract for Difference for less established technologies: Draft strike prices (£/MWh)
Scotland has tremendous wave and tidal energy resources (a third of the UK’s tidal stream resources and two thirds of the UK’s wave resources) and the potential exists to generate more electricity than needed from the waters around the Scottish coast.
The ocean energy sector in Scotland has progressed more in 2016 than in any previous year, with several world firsts achieved:
The Scottish Government remains strongly committed to the development of a successful ocean power industry in Scotland and to maintaining the current strong lead in this area. The Scottish Government established Wave Energy Scotland (WES) in 2014 to support wave energy technology development. WES funds are committed through a series of strategically targeted innovation projects and research activities, securing intellectual property for the benefit of the industry and driving novel technology development. WES has developed a structured stage gate process for competitive development of wave technologies that provides developers with up to 100% funding through a procurement model.
The programme operates a framework for assessing the performance of technology against set standards and metrics to provide transparency and risk reduction. WES committed £12m in funding in 2016 and recently announced 10 awards totalling £3 million for structural materials and manufacturing processes projects. WES expects to run a further call for control systems in spring 2017. The Renewable Energy Investment Fund (REIF) – designed to help ocean energy projects take the leap towards commercialisation–has so far invested over £40 million in a range of innovative wave and tidal schemes.
There are, however, challenges ahead. The impact on the industry of exiting the EU is not yet clear, but it is known that the marine energy sector in Scotland has benefited significantly from EU funding, which is now in some doubt. Added to that, the UK Government’s decision not to provide ring-fenced support for wave and tidal stream technologies in its subsidy scheme will have an impact on investor appetite and may reduce the attractiveness of the UK for marine energy developers. Scotland has worked collaboratively over the last year with its UK and European colleagues to identify and address the barriers facing the development of the ocean energy sector. This work was accomplished through active participation in a range of groups and workstreams, including the energy workstream of the British-Irish Council; the European Commission’s Ocean Energy Forum; and through leadership of a Horizon 2020 Ocean ERA-NET Cofund. Scotland will continue to work closely with technology and project developers, the supply chain, academia and public sector partners to unlock the potential of the UK’s marine energy industry.
The Welsh government remains in strong support of the ocean energy sector and spent 2016 putting in place several initiatives to support development of the sector. In addition to the positive message given by the Hendry review on tidal lagoons, Welsh government policies look set to promote the standing of the nation on the international ocean energy stage.
Over £1m has now been invested via the Marine Renewable Energy Strategic Framework which is carrying out largescale investigations in to the Welsh marine energy resource and the infrastructure requirements of ocean energy developments.
The Welsh government also regularly engages with the Crown Estate to improve access to maritime areas suitable for development. 2016 saw the renaming of Marine Energy Pembrokeshire to Marine Energy Wales. This Welsh government supported initiative is a partnership between developers, academia, the supply chain and the public sector with the aim of developing a Welsh marine energy centre of excellence. The organisation has developed closer links with Wave Hub through a management agreement for their proposed South Pembrokeshire Demonstration Zone.
Northern Ireland (NI)
DP Energy’s Fairhead Tidal project continued to move through the survey and consenting phases of development in 2016 with the support of the Northern Irish Government. Regional development agency InvestNI continues to engage with the ocean energy sector with a particular focus on finding matches between the sector and the Northern Irish supply chain. The NI Department of Agriculture, Environment and Rural Affairs (DAERA) is working to develop a Marine Plan for NI, with the aim of guiding the regulation, management use and protection of maritime regions.
The responsibilities previously held by DECC transferred to BEIS during 2016 while further work to devolve powers to the governments of Scotland, Wales and Northern Ireland went ahead. Perhaps most notably, the Crown Estate and UK and Scottish Governments are working to enable the transfer of The Crown Estate’s management duties in Scotland to the Scottish Government, as recommended by the Smith Commission and reflected in the Scotland Act 2016. It is expected that discussions, including public consultation, will continue through the first half of 2017.
The Crown Estate in Scotland includes a diverse portfolio of property, rights and interests that influence many aspects of rural and coastal life in Scotland. The new functions being devolved include rights to the seabed and management rights over around half the foreshore of Scotland. Taking on the Crown Estate’s role in the management of seabed rights out to 200 nautical miles around Scotland is also vitally important to being able to sustain the competitiveness of Scottish marine industries and to continue to derive wealth from the marine environment.
PUBLIC FUNDING PROGRAMMES
The Knowledge Transfer Network, operated by Innovate UK, maintains a wide-ranging and up-to-date listing of funding opportunities available in the UK. By far the majority of research and development funding for energy technologies can be found in this database, available at https://www.ktn-uk.co.uk/.
UK organisations which offer funding to ocean energy projects include:
Research Councils UK
The Research Councils UK Energy Programme provides funding for a wide range of technology areas, including marine, covering research and training. It brings together investments from across the UK research councils. http://www.rcuk.ac.uk/research/xrcprogrammes/energy/
Innovate UK is the UKs innovation agency and is an executive non-departmental body sponsored by BEIS. Innovate UK works with people, companies and partner organisations to find and drive the science and technology innovations that will grow the UK economy. https://www.gov.uk/government/organisations/innovate-uk
Wave Energy Scotland
WES – fully funded by the Scottish Government – is taking an innovative and unique approach to the development of wave technology in a new research programme. WES will support wave energy technology development until the technical and commercial risks are low enough for private investment to re-enter the sector. http://www.hie.co.uk/growth-sectors/energy/wave-energy-scotland/
RESEARCH & DEVELOPMENT
KEY R&D INSTITUTIONS
2016 saw EMEC host more new demonstration projects, with 27 devices from 17 companies now having been tested on site. EMEC’s alumni include the first tidal turbines at the MeyGen site from Atlantis and Andritz Hydro Hammerfest, as well as longest standing client OpenHydro installing a turbine in the Bay of Fundy (a scaled-up version of the 6m turbines they have been testing at EMEC since 2007). Scotrenewables’ 550-tonne 2MW tidal turbine arrived at EMEC in 2016, as well as Sustainable Marine Energy (SME) who successfully installed four subsea drilled rock anchors at its Fall of Warness for their first PLAT-O system, which hosts two SCHOTTEL Instream Turbines (SIT).
One of the biggest EMEC projects starting in 2016 was the launch of FORESEA – a new €11m European programme to support open sea testing for ocean energy. Led by EMEC, the FORESEA (Funding Ocean Renewable Energy through Strategic European Action) project provides funding support to ocean energy technology developers to access Europe’s world-leading ocean energy test facilities. The first call for applications was closed in September, with ten successful ocean energy developers announced.
In late 2016, Carnegie Clean Energy confirmed that it intends to develop a 15 MW array of the CETO 6 wave energy converter at the Wave Hub site. As work on this development ramps up, Wave Hub continues to focus on environmental survey and consenting work.
Nova Innovation Shetland
Scotrenewables Lashy Sound
Carnegie Wave Hub
Tidal Power Scotland Ltd (TPSL)
MARINE SPATIAL PLANNING POLICY
An interactive tool – the Marine Information System - explains how marine plans apply to different marine sectors and geographic areas. It highlights policies that apply to a chosen area to inform plan users (available at: http://mis.marinemanagement.org.uk/).
Eleven marine plan areas will have a marine plan with a long-term (20 years) view of activities and will be reviewed every 3 years. There will be ten marine plans as the North West will have a single plan following requests to have a single process and one plan for these areas. All marine plan areas are scheduled to have a plan by 2021.
The Crown Estate carries out periodic tendering processes for wave/tidal areas. These areas are scoped and Strategic Environmental Assessments (SEA) carried out.
• Marine Management Organization (MMO);
In English and Welsh offshore waters, marine licenses, section 36/A consents, and safety zones are determined by the MMO. In Welsh inshore waters, marine licenses are determined by the NRW and section 36/A consents and safety zones by the MMO. Decommissioning of offshore renewable energy installations is regulated by the Department of Energy and Climate Change (DECC).
ENVIRONMENTAL IMPACT ASSESSMENT
Assessment is based on the size, nature, and location of each proposal as directed by Annex II of the Marine Works (Environmental Impact Assessment) Regulations 2007 or Schedule II of the Electricity Works (Environmental Impact Assessment) (England and Wales) Regulations 2000.
The Marine Management Organization (MMO) is responsible for providing a decision on whether an EIA is required or the applicant can voluntarily opt in to the process.
The Environmental Statement (ES) will be submitted at the application stage for a marine license. However, draft ES chapters may be reviewed by the MMO and its technical advisors at the pre-application stage.
LEGISLATION AND REGULATION
• The Electricity (Offshore Generating Stations) (Applications for Consent) Regulations 2006;
Legislation and regulation that has been adapted to better suit ocean energy:
• Electricity Act 1989 for section 36 consents and safety zones.
This is done primarily through the online portal Marine Case Management System (MCMS) but also by email to other consultees as appropriate.
There are statutory consultees stipulated in either the Marine and Coastal Act 2009, the Marine Works (Environmental Impact Assessment) Regulations 2007 or Electricity Works (Environmental Impact Assessment) (England and Wales) Regulations 2000. Consultation in taken on a case-by-case basis.
There are no informal consultation activities implemented during the licensing process.
GUIDANCE AND ADVICE