NATIONAL ENERGY STRATEGY
The design and implementation of energy policy within the UK is a complex mix of reserved, devolved and shared competencies, where responsibility is broadly shared between the UK Government and the devolved governments in Scotland, Wales and Northern Ireland, each of which has differing degrees of autonomy in policy decision-making. Although the successful delivery of a future clean energy system is a shared ambition by both national and devolved governments, there is some divergence in the different Net Zero timelines which each nation has adopted. For example, the Scottish Government are aiming to deliver Net Zero by 2045, as opposed to 2050 in the rest of the United Kingdom.
The research, development and implementation of energy policy at a UK Government level is primarily the responsibility of the Department for Energy Security and Net Zero (DESNZ). This new government department, formed in 2023, has taken on the energy policy responsibilities of the former Department for Business, Energy and Industrial Strategy (BEIS).
Within the UK, energy policy is largely transferred (devolved) to the Northern Ireland Executive. It is broadly reserved to UK Government in respect of Scotland and Wales, limiting the ability of Scottish and Welsh Governments to make decisions and policy independently of UK Government. However, the ability to enact policy which is designed to tackle climate change, through policy levers such as the promotion of renewable energy; energy efficiency; electricity generation; and transmission development is devolved to some extent. This provides each of the devolved governments with at least some powers to determine their overall domestic energy mixes.
United Kingdom
2024 marked the beginning of a new chapter in the UK’s ongoing journey towards its legally mandated 2050 Net Zero targets. On 4th July, the UK electorate voted the Labour party into power with a landslide majority and with it arrived a new set of ambitions for the UK’s Net Zero energy transition. The new UK Government ran on an ambitious manifesto, promising big changes to the UK’s climate and energy policies, many of which will have a knock-on effect for the ocean energy sector. A number of these are listed below:
• The most ground-breaking of Labour’s energy commitments in their manifesto was the promise to establish Great British Energy (GBE), a publicly owned clean energy company. As a fundamental part of the government’s plan to make the UK a clean energy superpower by 2030, GBE will drive clean energy deployment by investing in and owning energy projects, leading projects through their development stages, supporting local and community energy generation, and facilitating the growth of supply chains across the UK.
• The incoming Labour government also arranged to acquire the Energy System Operator, which is now a new publicly owned organisation, the National Energy System Operator (NESO). The NESO will support the UK’s energy security, help to keep bills down in the long term and accelerate the government’s clean power mission.
• In the recently published Clean Power 2030 Action Plan, the Labour government committed to signalling key projects for clean power and speeding up planning and consenting processes across Britain. This is of significant importance for the ocean energy sector who are reliant on national grid upgrades and the development of ports and harbours to support the sector.
These commitments come at a moment when the UK, which itself is experiencing the challenges and dangers of a rapidly warming climate, has an increasingly important role as a world leader in the effort to mitigate the worst extremes of the climate emergency. While the Net Zero energy transition will provide the obvious benefit of lowering carbon emissions, it also proves the opportunity for jobs, socio-economic growth and the development of new sustainable industries, all housed within the UK. However, these benefits are also being chased by competing nations across the globe and the UK currently faces growing competition from the USA, China and the EU, all of whom have committed to large-scale, well-resourced policy programmes to promote the accelerated uptake of renewables into their national energy mixes. With just under 5 years remaining for the UK to meets the ambitions set out in the recent Clean power 2030 Action Plan, the argument for faster progress and continued leadership with regards to sustainable policies is clear. The role of wind and solar as the foundation of the UK’s established Net Zero energy system is now well-established, with long-term deployment targets set and policy support to deliver in place. However, ensuring that the UK can achieve a sustainable, diverse and resilient energy mix, that harnesses all our national resources, will be necessary to ensure that a Net Zero energy system is delivered in a cost-effective manner. To this end, there is now a growing understanding of the role that the UK’s abundant wave and tidal stream resources could play in helping to underpin and strengthen the national energy mix. This growing consensus is also reflected in the prevalence of ocean energy aims and objectives within high-level policy guidance reports published by the UK government over the previous year:
• In December 2024, the UK Government announced its plans for a new era of clean electricity, delivering on its manifesto commitment for clean power by 2030 with the Clean Power 2030 Action Plan. This Plan, designed to make Britain a clean energy superpower, proposes the most ambitious reforms to the energy system in generations. While the tidal stream sector is identified as having a limited role to play in the 2030 energy mix, achieving volume deployment of these technologies is identified as having potential long-term value to the UK’s decarbonisation targets.
• In October 2024, the UK Government launched its latest industrial strategy, Invest 2035, outlining that growth of critical sectors is the number one mission of the government over the next ten years. Within this strategy, advanced manufacturing and clean energy industries are identified as two of the 8 growth-driving sectors. This is welcome news for the ocean energy sector and the domestic supply chains that are looking to scale-up in line with the expected growth of the sector.
Scotland
Scotland continues to hold the most ambitious climate targets within the UK, with the Scottish Government committed to achieving net zero emissions of all greenhouse gases by 2045. In December 2020, the Scottish Government updated its Climate Change Plan, reflecting the increased ambition of the targets set by the Climate Change (Scotland) Act 2019. In April 2024, following feedback from the Climate Change Committee that it no longer believed Scotland’s flagship target of reducing greenhouse gas emissions by 75% by 2030 was achievable, the Scottish Government announced the replacement of its annual targets with a system of multi-year carbon budgets. This change in policy underlines the challenges faced by the Scottish Government and emphasises the need for a proactive approach to energy policy and the rapid rollout of a diverse renewable energy system. The 2045 net zero target for Scotland remains in place.
Scotland's geographical location on the western edge of Europe and its unique geography of seaways and firths, exposes it to a combination of intense winds, Atlantic waves and turbulent tidal currents. As such, the country is well situated to harness its ocean energy potential, should the required infrastructure and financial support be provided. In early 2023, the Scottish Government published a draft Scottish Energy and Just Transition Plan which presents a vision for Scotland’s decarbonised energy system and the collective actions needed to deliver this and contains a headline ambition for more than 20GW of additional low-cost renewable energy generation capacity to be installed by 2030. This draft report also states that new developments of wave and tidal stream devices have the potential to quadruple the existing installed capacity to around 40 MW in Scottish waters by 2027, which could make a valuable contribution in addressing Scotland’s total energy demand. This initial draft has also been accompanied by a comprehensive public consultation process, inviting communities, workers, citizens and businesses to provide feedback and shape Scotland’s energy transition. This has resulted in just over 250 responses on two questions seeking views on the need for setting a marine energy ambition and identifying priority actions to build on the achievements of the sector in Scotland to date. However, as of the end of 2024, this draft Plan is still yet to be published. Scotland has also benefited from the formation of the Offshore Wind Directorate, a Scottish Government department responsible for the development of policy work related to offshore renewables, marine energy and sectoral marine planning. The Offshore Wind Directorate supports the growth of the offshore wind and marine energy sectors and the development of Scotland’s supply chain by growing its manufacturing base and attracting inward investment, demonstrating the potential role for marine energy in Scotland’s low carbon energy system and managing the environmental impacts of, and risks to, Scotland’s journey to net zero through offshore renewables.
Over recent years, Scotland’s ocean energy sector continues to make substantial progress as wave and tidal stream developers progress on the journey towards commercial-scale deployment. The 2024 CfD AR6 was a great success for the Scottish tidal stream sector, with five new contracts shared amongst three developers, who are now set to deploy in Scottish waters, securing around 18 MW of the total 28 MW of tidal stream capacity across the UK. Combined with the successful auctions from AR4 and AR5, there is now nearly 84 MW of tidal stream energy set for deployment in Scotland by the end of 2029. This represents a significant proportion of the global allocated capacity for tidal stream and highlights Scotland’s position as a pioneer in the development and deployment of tidal stream energy, and the role that the technology could play in Scotland’s future net zero energy system. The Scottish Government, together with the industry itself, continues to engage with the UK Government to ensure that maximum support, sufficient budget and more long-term certainty is provided to Scottish marine energy projects in CfD AR7, due to take place in 2025, and in future rounds. Finally, not all of Scotland’s tidal stream success was linked to the CfD scheme, with Scottish developers Nova Innovation and Orbital Marine Power each securing €20m worth of Horizon Europe funding for tidal stream arrays off the coast of Orkney, rated at 4 MW and 9.6 MW respectively.
Through Wave Energy Scotland (WES), which receives majority of its funding through the Scottish Government, the Scottish wave energy sector has continued to benefit from sustained support and guidance to advance research, development and deployment of wave energy in Scotland. After the successful demonstrations of the AWS Waveswing and Mocean Energy Blue-X devices in Scottish waters, WES has continued to support its emerging technologies through innovation projects and the creation of commercialisation pathways. Scotland continues to play a leading role in international collaboration efforts by delivering the EuropeWave device development programme in partnership with the European Commission, Ente Vasco de la Energía (EVE) and Ocean Energy Europe.
Wales
2024 has proven to be an important year for the Welsh ocean energy sector, where, for the first time, the future development and deployment of both wave and tidal stream energy devices can be seen as potentially playing an important role in meeting long-term energy commitments. Following on from its 2019 climate emergency declaration and subsequent commitment to reach Net Zero by 2050, the Welsh Government has also committed to ensuring that 100% of the country's annual electricity consumption is powered by renewable sources. Coupling this ambitious commitment with the Welsh Governments stated desire to support innovation in new renewable energy technologies places ocean energy at the forefront of the energy transition in Wales.
Welsh waters, with some of the highest tidal ranges in the world and a highly energetic Atlantic-facing coastline, are a prime location for the deployment of wave and tidal stream devices, and as such are drawing interest from a range of developers and test-site hosts. This has resulted in multiple milestones, from the ongoing success of Wales’ first tidal stream energy test site, Morlais, to the award of a 10 MW contract to the Ynni'r Lleuad 2 scheme from HydroWing via AR6 in the CfD scheme. Combined with the successful auctions from AR4 and AR5, there is now 38 MW of tidal stream energy set for deployment in Wales by the end of 2029. In addition, the Welsh Government published an independent review of the Marine Licencing Process, providing an important opportunity to improve and streamline the consenting process and support the accelerated development of ocean energy in Wales. The Welsh government has consistently stated its commitment to providing strong policy support for the ocean energy sector, with an aim of capturing at least 10% of the potential tidal stream and wave energy off the Welsh coastline by 2025. This has led to an increasing number of technology developers choosing to site their testing and deployment in Welsh waters, such as Tidal energy developer HydroWing, who moved headquarters to Anglesey in early 2024.
The responsibility for coordinating the research and development of the ocean sector in Wales lies largely with Marine Energy Wales (MEW), the industry-led stakeholder group representing the wave, tidal and floating offshore wind industries. The MEW 2024 State of the Sector report highlights how Wales’ marine renewable energy sector delivered an impressive £29.9 million to the Welsh economy during the 2023/24 financial year, bringing total cumulative spending and investment from the sector in Wales to roughly £292.9 million. Of this total, tidal stream has been by far the biggest contributor to date, injecting £116.1 million into the Welsh economy. Much of this has been fuelled by the infrastructure buildout at Morlais and the activity of tidal kite developer Minesto. Supply chain spend has accounted for £63.6 million to date. Projects developed thus far have utilised an impressive amount of local content, some as high as 80%, underscoring the importance of developing a robust local supply chain to maximise economic benefits in Wales. The MEW report also estimates that the ocean energy sector provides employment to approximately 430 full time employees across areas such as technology development, supply chain and academia.
Management of UK Seabed
The seabed that surrounds the UK lies largely under the ownership of the British Crown. Where this applies, this seabed portfolio is maintained and managed for the benefit of the nation by The Crown Estate and, in Scotland, by Crown Estate Scotland.
The Crown Estate
The Crown Estate has a diverse £16bn portfolio that includes urban centres and development opportunities; one of the largest rural holdings in the country; Regent Street and St James’s in London’s West End; and Windsor Great Park. The Crown Estate also manage the seabed and much of the coastline around England, Wales and Northern Ireland, playing a major role in the UK’s world leading offshore wind sector.
The Crown Estate are a unique business established by an Act of Parliament, tasked with growing the value of the portfolio for the nation and returning all of its net profit to HM Treasury for the benefit of public spending. This has totalled £4bn over the last ten years. Through its activities and investments, The Crown Estate creates environmental, social and financial value both for now and into the long term.
Crown Estate Scotland
Within Scotland, Crown Estate Scotland manages property – including buildings, land, coastline and seabed – on behalf of the Scottish people. The Scottish Crown Estate Act 2019 provides a national framework covering a range of matters relating to management of the Scottish Crown Estate. This requires Crown Estate Scotland to manage the assets in a way that is likely to contribute to the promotion of economic development, regeneration, social and environmental wellbeing. Crown Estate Scotland is a public corporation that holds the rights to lease the seabed out to 12 nm for cables, pipelines and aquaculture and the rights to offshore renewable energy and gas storage out to 200 nm. Net revenue generated by Crown Estate Scotland is returned to the Scottish Government and capital is reinvested in the Scottish Crown Estate, with a £113.2 million returned in the 2023/24 financial year to aid in public spending. In the wave and tidal energy space, Crown Estate Scotland continue to offer ad-hoc leasing whereby applicants can apply for seabed rights to develop projects up to 30 MW in capacity.
MARKET INCENTIVES
Contracts For Difference
The Contracts for Difference (CfD) scheme is the UK government’s flagship program for supporting low-carbon electricity generation. Based on top-up payments between a wholesale market reference price and a strike price, CfDs offer long-term price stabilisation and are awarded via competitive auctions. The CfD scheme incentivises investment in renewable energy by providing developers of renewable energy projects, normally projects with high upfront costs and long lifetimes, protection from volatile wholesale prices. To date, there have been six allocation rounds (AR) which have seen a range of renewable energy technologies bid for contracts, with competitive auctions being the current method by which these contracts are awarded. In AR4, AR5, and AR6, tidal stream has benefitted from a dedicated minimum budget in the auction, where support is ringfenced for tidal stream in the CfD auction round before the competition opens up to other renewable technologies. For AR6 this resulted in four developers across five sites securing six contracts to deliver 28 MW of tidal stream capacity at a rate of £172/MWh:
• Nova Innovation were successful in securing three contracts amounting to 6 MW of tidal stream capacity, 4 MW under the SEASTAR project and 2 MW under the OCEANSTAR project. Both of these projects will be deployed at EMECs Fall of Warness test site.
• SAE Renewables have successfully secured an additional 9 MW contract to be deployed at their MeyGen project, bringing the total under development to 59 MW.
• Magallanes Renovables were successful in winning a 3 MW extension to its existing scheme at EMEC.
• Inyanga Marine Energy Group have been awarded a further 10 MW contract to support their project at the Morlais Demonstration Zone in Anglesey, Wales.
Building on the 94 MW of tidal stream capacity that was awarded in AR4 and AR5, there is now a total pipeline for 122 MW of tidal stream projects in the UK, all of which are expected to be commissioned by 2029. While wave energy projects have not yet been successful at CfD auctions, developers are increasingly confident that the technology is approaching the levels of technological maturity required to bid for multi- MW contracts.
For the first time, the CfD will also run a Clean Industry Bonus (CIB), a competitive allocation process extra revenue support which runs before the main CfD auction. The CIB is designed to encourage applicants to invest in more sustainable supply chains across their project’s development and deployment. The CIB application window is currently scheduled to open in February 2025, however at present the allocation is only available to offshore wind developers.
PUBLIC FUNDING PROGRAMMES
UK Research and Innovation
Launched in April 2018, UK Research and Innovation (UKRI) is a non-departmental public body sponsored by the Department for Science, Innovation and Technology. UKRI is the national funding agency investing in science and research in the UK. Operating across the whole of the UK with a combined budget of more than £6 billion, UKRI brings together the seven Research Councils, Innovate UK and Research England.
Engineering And Physical Sciences Research Council
The Engineering and Physical Sciences Research Council (EPSRC) is the main funding body for engineering and physical sciences research in the UK. The EPSRC aims to create knowledge and fund innovation with the capability to benefit both society and the economy by supporting research through the provision of fellowships, studentships, research and training grants, competitive funding, and prizes. The EPSRC funds and co-invests with industry, at both national and international levels, helping to deliver advanced research facilities and resources for engineering and physical sciences, including wave test facilities and tidal tank testing. EPSRC also provides technology push policy support mechanisms, such as the Industrial CDT in Offshore Renewable Energy (IDCORE), a programme designed to provide sector-specific training to bring forward the next cohort of highly skilled engineers, which was renewed and will now run until 2032. In addition, IDCORE also provide a number of fellowships, managed activity, standard grants and programme grants and is also responsible for funding the ORE Supergen Impact Hub.
Innovate UK
Part of UKRI, Innovate UK inspires, involves, and invests in businesses developing life-changing innovations to create a better future. Providing sectors with expertise, facilities and funding, Innovate UK helps test, demonstrate and evolve ideas, driving UK productivity and economic growth. Innovate UK’s network and communities of innovators realise the potential of ideas and accelerate business growth.
Wave Energy Scotland
Since 2014, Wave Energy Scotland (WES) has been using Scottish Government funding, alongside a competitive stage gate process, to tackle the key technical challenges of wave energy generation, pushing innovative solutions from concept towards commercialisation. Separate funding streams have supported the development of novel wave energy devices, power take-off systems, control systems, quick connection systems and materials. Alongside this, WES is supporting further development of wave devices through the EuropeWave programme, in partnership with the European Commission, Ente Vasco de la Energía (EVE) and Ocean Energy Europe.
During 2024, WES has focused on continued innovation support and promoting commercialisation pathways for the emerging technologies, including opportunities for co-location with the growing floating wind sector and grouping wave devices into multi-megawatt clusters. Building on a 2023 study which showed significant cost of energy reduction for wind and wave projects, WES is working to demonstrate the benefits and feasibility of multi-use marine spaces, aiming to maximise the energy generation and economic benefit from available sea areas while helping balance the energy system.
In support of more radical cost-reduction opportunities, WES continued the Direct Generation competition, funding enabling R&D and concept design projects using flexible wave energy devices based on electrostatic power conversion technologies. WES continues to collaborate widely, playing a leading role in the guidance and delivery of the innovation activity required to take wave energy towards commercial readiness and contribution to net zero.
Scottish Enterprise
Scottish Enterprise (SE) is Scotland’s national economic development agency and a non-departmental public body of the Scottish Government. It supports businesses to transform the Scottish economy, by focusing on new market opportunities through targeted investment, innovation and internationalisation. SE has a focus on economic transformation with a goal to create a more productive, resilient and competitive economy for Scotland. This will be accomplished through three interlinked missions: to create an internationally competitive renewable energy industry in Scotland; to scale the impact of Scotland’s innovation strengths in future high growth industries; and to drive capital investment to deliver a step change in Scotland’s productivity.
Marine energy is an important part of the effort to create an internationally competitive renewable energy industry, and as such, SE commissioned a report on the economic benefit of tidal stream energy to Scotland by 2050. The report looks at the potential GVA and jobs that 4.3 GW of tidal stream energy deployed in Scotland could bring to the Scottish economy, as well as the economic benefits from UK and international deployments. The report is due to be published in early 2025.
SE, as part of a group of Scottish public sector organisations including Highlands and Islands Enterprise, Crown Estate Scotland and Wave Energy Scotland, sponsored the Ocean Energy Europe conference for its return to Scotland in 2024. The event, held in Aviemore, showcased the Scottish opportunities in marine renewables and European developments in this sector.
In 2024, Scottish Enterprise, on behalf of all the Scottish Economic Development agencies led on delivery of the European Clean Energy Transition (CET) Partnership a Horizon Europe partnership that provides funding for trans-national collaborative R,D&I projects. The Scottish budget for the Joint Call 2024, which closed for pre-proposals in November 2024, is €5 million. The call includes opportunities for ocean energy under the call module “advanced renewable energy technologies for power production”. Results of the call will be published in July 2025.
MARINE SPATIAL PLANNING POLICY
Marine Spatial Planning (MSP) policy exists in UK but it is used as a decision making tool currently only in the East of England Inshore and Offshore areas.
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.
AUTHORITIES INVOLVED
The authorities involved in the consenting process are:
• Marine Management Organization (MMO);
• National Resources Wales (NRW).
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).
CONSENTING PROCESS
Main sequential steps (licenses, consents, permits) required to get permission for project deployment is presented in the following link:
https://www.gov.uk/planning-development/marine-licences.
ENVIRONMENTAL IMPACT ASSESSMENT
An Environmental Impact Assessment (EIA) is assessed on a case-by-case basis.
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
Legislation and regulations related solely with the consenting process for ocean energy:
• The Electricity (Offshore Generating Stations) (Applications for Consent) Regulations 2006;
• The Electricity (Offshore Generating Stations) (Safety Zones) (Application Procedures and Control of Access) Regulations 2007;
• The Electricity Act 1989 (Requirement for Consent for Offshore Wind and Water Driven Generating Stations) Order 2011.
Legislation and regulation that has been adapted to better suit ocean energy:
• Electricity Act 1989 for section 36 consents and safety zones.
CONSULTATION
Consultation process is initiated after the initial checking of the application.
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
The MMO have a Key Performance Indicator (KPI) target of 13 weeks to make a determination on a marine license application from when it is received with us. There is no such KPI for 36 consents or safety zones.
Information about what permits are required, in what order and what information must be supplied at what time is available at a dedicated web link.
TEST CENTERS
Usually deployment in designated test centers are already pre-consented so developers do not have to submit a full application comprising all the typical consents providing certain initial conditions are met. This is the approach encouraged for applicants to adopt in order to streamline the consenting process for the deployment of demonstration devices.
