Thursday, 29 October 2009

BWEA: Current funding for marine generation is not enough
26 October 2009

Without more funding from government, Britain is at risk of losing its position as the market leader of the marine industry, as well as the social and economic benefits that would follow, according to a report released this month by the British Wind Energy Association (BWEA). In its 'State of the Industry' report, the trade organisation, which has increasingly been concerned with the marine industry, said the level of UK support for marine energy was not yet of the magnitude required to develop a world-class industry and that Britain risked promising research and development moving overseas.

The BWEA said that revenue support of five Renewables Obligation Certificates (ROCs) or equivalent would be an appropriate level to support marine energy projects after the initial 10MW of capacity has been installed. It claimed that at a support level of two ROCs, commercial-style projects were "unlikely" until each marine technology had deployed at least 100MW of cumulative installed capacity.

The report noted a belief in the marine industry that despite the opening of the Marine Renewable Proving Fund (MRPF) in September, there was a funding gap between the capital grants available for small prototype development and the revenue support for long-term operation of projects, making it difficult for small-scale developers to realise projects. Without "sufficient support in the early stages of development", the BWEA said that an installed capacity of 1GW of marine energy projects would be difficult to achieve, falling short of its members' estimated potential for UK waters of up to 2GW.

The BWEA added that grant support available for research and development was "disjointed" as it was provided by a range of different bodies - the Carbon Trust, Scottish Government, the Technology Strategy Board (TSB) and the Environmental Technology Institute (ETI) - which means applying for funding, and identifying the appropriate source, is complex. As well running the MRPF, the Carbon Trust makes funding available through the Marine Renewables Development Fund (MRDF) for projects closer to commercialisation. The report said that to date, no projects have met the MRDF's eligibility criteria of a three month full scale sea trial due to a lack of support for prototypes.

In addition, the significant costs of deployment due to factors such as competing with other offshore industries for specialist vessels and waiting for suitable weather windows are not being covered, it claimed. The MRPF is seen as filling some of this gap, and the BWEA said it expected a number of devices to achieve the criteria over the next few years. However, the BWEA urged the government to ensure that long term funding was available for testing at sea and to reflect the high costs of installing the initial projects.

Foreign shores
The report also expressed a fear that because of the more generous support given to marine technologies in Scotland, and abroad, developers will look to base projects outside England and Wales. Since 2006, the Scottish government has supported nine projects through its £13.5 million Wave and Tidal Energy Support Scheme (WATES) and plans to increase support available to three ROCs per MWh for electricity generated from tidal power devices and five ROCs per MWh for wave energy.

Portugal was cited as an attractive energy market with a support level of 23 cents/kWh, and Pelamis Wave Power has already installed the world's first multi-unit wave farm, amounting to 2.25MW of wave energy capacity, in Portuguese waters. The BWEA said that the five ROCs level would be appropriate to support marine energy projects after the initial 10MW of capacity has been installed. However, it added that the development of the first small-scale projects to achieve this installed capacity would require capital grant funding in addition to revenue support.