Isra-Mart srl:Barker promises wave of support for marine energy projects

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Climate minister Greg Barker today attempted to alleviate concerns across the marine energy industry that the sector will face a funding shortfall when the government this month phases out the £42m Marine Renewable Deployment Fund, promising that the coalition would invest "real money, time and political capital" in supporting a sector that has the potential to become a strategic industry for the UK.

However, he failed to provide precise details on how and when the government will improve support for the sector, while industry representatives admitted they were "nervous" about whether planned reforms would help attract the investment necessary to get the next generation of marine energy projects in the water.

Speaking at the annual Wave & Tidal Energy Conference in London, Barker said that – despite the fiscal pressures created by the largest peacetime deficit in British history – the coalition remained fully committed to expanding the UK's world-leading marine energy industry as a means of driving exports, creating jobs, cutting greenhouse gas emissions, and enhancing energy security.

"It seems to me quite bonkers that in this island nation of ours – surrounded by seas and ocean, with our great marine heritage and genius for advance engineering, coupled with the threat of climate change and dwindling traditional domestic energy resources – we haven't done more to exploit this abundant resource," he said. "This has to change."

Barker added that the Department of Energy and Climate Change (DECC) was currently working on a "new philosophy" for supporting the sector after the previous government set such tight criteria for accessing the Marine Renewable Deployment Fund that hardly any projects have been able to take advantage of the support.

He mapped out plans for a new support regime, including a soon-to-be-announced marine energy project from the Energy Technologies Institute; the creation of government-supported marine energy clusters, the first of which is likely to be located in the south west; and an overhaul of the current revenue support available to marine energy through the Renewable Obligation as part of the government's ongoing Electricity Market Reforms.

Barker also floated the idea of improved support for wave and tidal energy projects through the Renewable Obligation or a new system of feed-in tariffs, but on the understanding that the total level of support over a given period would be capped.

In addition, he said he was working with universities minister David Willetts to draw up a Technology Innovation Needs Assessment (TINA) for the marine energy sector, which could help determine the extent to which it can access funds available from the government's various innovation support funds and Local Enterprise agencies.

However, the minister stopped short of providing details on how much funding and revenue support will be available, and offered little insight on when the new regime will come into effect beyond a commitment to fast-track the review of Renewables Obligation support with the goal of reaching a decision later this year.

Maria McCaffery, chief executive of trade association RenewableUK which hosted today's conference, admitted the marine energy industry was "nervous" about the future, adding the sector was currently at a crucial point in its history where it could either entrench its position as the world's leading marine energy market or risk companies migrating overseas.

RenewableUK today launched its new Seapower campaign, calling on the government to step up financial support for the sector. Specifically, it is asking ministers to ring-fence £70m from DECC's £200m Low Carbon Innovation Fund for marine energy projects, earmark £60m from the proposed Green Investment Bank for marine energy, and provide all marine energy projects across the UK with the five renewable obligation certificates (ROCs) per MWh of energy generated that is currently enjoyed by wave projects in Scotland.

RenewableUK officials said that with DECC's Low Carbon Innovation Fund already in place for next year, the industry was hoping for a signal in this month's budget that a chunk of the money would be used to replace the Marine Renewable Deployment Fund.

To further support its case, the trade body today released a new state of the industry report showing that 3.4MW of marine energy capacity is already installed in the UK with a further 4MW due to be added this year, 11MW consented and 23MW in the planning system.

Oliver Wragg, RenewableUK's wave and tidal development manager, said that marine energy could create 10,000 direct jobs and revenues of nearly £4bn a year by 2020 with the right support, while ultimately generating up to a fifth of the UK's electricity.