Tidal energy projects awarder CfDs for first time

Tidal power and offshore wind awarded CfDs for the first time in UK government’s low-carbon electricity auction.

Tidal energy projects awarder CfDs for first time
Photo: SIMEC Atlantis

The fourth round of the UK government’s flagship renewable energy auction scheme has secured almost 11 GW of clean energy – enough to power around 12 million homes – with tidal power and floating offshore wind winning contracts for first time.

The Contracts for Difference (CfD) scheme is the government’s main mechanism for supporting low-carbon electricity generation helping to boost British energy security and independence with cleaner, more affordable and diverse energy created in the UK.

CfDs give certainty to project developers to invest in new renewable energy infrastructure by protecting them from volatile wholesale prices.

The fourth CfD round has delivered energy from a greater number of renewable technologies than ever before, helping to ensure a more secure, more resilient energy system. Developing technologies – tidal stream and floating offshore wind projects – were successful for the first time: tidal stream returned a capacity of 41 MW and floating offshore wind returned 32 MW.

The greatest capacity – almost 7 GW – has been secured from new offshore wind projects around the coastline of the UK, a significant step towards meeting the government’s 50 GW by 2030 offshore wind ambition.

Photo: Orbital Marine

41 MW of tidal energy projects in were granted contracts at a tidal stream strike price of £178.54/MWh:

  • Orbital Marine was awarded two CfDs totalling 7.2 MW tidal energy deployments at EMEC’s Fall of Warness site;
  • Simec Atlantis secured 28 MW to further develop the MeyGen site in Caithness; and
  • Magallanes were awarded 5.6 MW for a tidal energy project at Morlais in Wales.

Sue Barr, Chair of the UK Marine Energy Council added:

“Tidal stream is forecast to be cheaper than new nuclear at the point of 1 GW of deployment, supports the UK creating sustainable jobs and supply chains in coastal communities and beyond, whilst boosting energy security through an entirely predictable baseload-style renewable energy resource.”

Claire Mack, Chief Executive of Scottish Renewables, told how the prices achieved today showed how competitive renewable energy can be with the right government support but warned of the reality of building projects such low prices:

“Make no mistake, today’s auction results are a turning point for tidal power, showing as they do that it has a place in the UK’s energy mix. But while the prices achieved in this most recent auction are an incredible milestone, it must be remembered that tidal energy is still in a developmental phase and most developers will be unable to bid so low in future.

“We would therefore urge the UK Government to confirm that its plans for future auction rounds include a dedicated, ring-fenced budget for tidal stream projects and also to commit to reforming the Contracts for Difference mechanism to allow UK supply chain companies to be more competitive."