Tidal stream energy could dive to record low cost
Tidal stream energy could plummet below USD92 per MWh by 2035 if current opportunity is realised, a new industry-leading report has predicted.
The ‘Cost Reduction Pathway of Tidal Stream Energy in the UK and France’ report, produced by the Offshore Renewable Energy (ORE) Catapult as part of the Interreg FCE funded TIGER project, documents the global state of the tidal market, and presents a cost reduction trajectory taking tidal stream energy from its current price of YSD298/MWh down to USD89/MWh by 2035.
Simon Cheeseman, Sector Lead for Wave and Tidal Energy at ORE Catapult, says,“This report presents a cost reduction trajectory for the tidal stream energy industry and an effective way to track progress over the next fifteen years. It allows technology providers, policymakers, and investors to see how the industry has evolved, and how tidal stream can make a significant contribution to energy security in the future. The sector has never been stronger and the roll out of tidal stream energy is a huge opportunity we must capitalise on.”
The report found that drivers for tidal stream energy (TSE) cost reduction include scaling up the size and power of tidal devices, and development of larger TSE farms. Moving to piled foundations and anchors for fixed bottom and floating devices respectively would also deliver cost savings. Longer term, the report estimates that a LCOE of USD68/MWh could be reached by 2042 and USD57/MWh by 2047. Economic benefits, in recent studies from the University of Edinburgh and University of Manchester, were also highlighted. TSE projects generate over 80% of materials from the local supply chain, create up to 45 jobs per MW deployed – exceeding the wind and solar industries, and could contribute up to USD19 billion to the UK economy by 2050. It also highlighted that the UK could capture 25% of the international market value of TSE through export.
The report suggests that 877MW of TSE could be deployed in the UK by 2035, in agreement with the Marine Energy Council’s ask for the UK Government to commit to 1GW of marine energy deployment by 2035. The report also highlights that TSE could dramatically improve domestic energy security and reduce costs in the future energy system due to its predictable nature. An increasing emphasis on domestic energy security presents an opportunity for TSE to build capacity as a reliable and forecastable complementary renewable energy source.
Caroline Lourie, Technical Manager, at the European Marine Energy Centre (EMEC), states, “The UK remains the most attractive global market for tidal stream energy, with over 10GW potential. In 2021, USD23 million a year was ring-fenced for the sector through the UK Government’s Contracts for Difference scheme; an important endorsement of the industry. However, to drive down costs so that tidal energy is competitive with other renewables, a huge ramp up of installed capacity will be needed over the next decade. For this to happen, we need long-term policy support and continued ring-fenced funding.”
The report called on policymakers in the UK and France to support the TSE cost reduction trajectory by committing to industry deployment targets, ensure TSE has a secure route to market such as ring-fenced funding in the UK Government’s Contracts for Difference rounds, and streamline the consenting process to strengthen the project pipeline. These three actions will improve private sector confidence, open new TSE funding streams, and accelerate the cost reduction process.