Check against delivery
Good afternoon. I am delighted to be here among you today to give the keynote address for the opening of this 10th Wave and Tidal conference.
10 years! Now, this seems like a perfect opportunity for us to reflect on and celebrate the progress the sector has made to date. But before I do so, let me stress the 3 key points of my speech today:
- This government supports wave and tidal 110%
- We can be proud of the progress we’ve made in recent years
- We need to go further. Now is the time for bold next steps - moving from individual projects to large-scale arrays.
And that is my key message today. It’s time, time for a bold step forward.
This month, the Prime Minister re-iterated the Coalition Government’s commitment to the green agenda. He said “When I became Prime Minister I said I wanted Britain to have the greenest government ever and I am as committed to that today as I was then. But I want to go further.”
To me it is crystal clear. If we want to go further, Marine Energy must be part of that ambition. This is also why the Coalition Government pledged to support marine energy when we came to power.
But my support for the sector goes back way beyond May 2010. I believe that the world-class marine energy resource we have around the UK and our outstanding technical and engineering capability make us the natural global leader of this exciting new sector.
Make no mistake, this will not be an easy achievement. We are in a global race. Prosperity, innovation and economic leadership have to be earned – they are not our right. We are also developing the sector in a tough economic climate, where securing new funding in every sector is proving challenging.
However, this Coalition Government recognises that renewables are a global growth sector and that the UK can reap the economic rewards of its leadership. However we also need to recognise that renewables don’t live in a bubble. This is why we need to commercialise the sector sooner, scale up quicker, and make less go further.
This is vital to the success of the sector and we must ensure we do not rest on our laurels. But allow me first to reflect on the extraordinary advances that we have made to date.
Progress of the marine sector
One of the most significant changes in the industry in recent years is the move away from resource-constrained individual entrepreneurs.
Large process engineering companies are now entering the market. In the last year alone we have seen the acquisition of Marine Current Turbines by Siemens, of Tidal Generation Limited by Alstom and of OpenHydro by DCNS.
These organisations bring with them the necessary expertise to move the sector towards commercialisation. This is vital to the future of the sector. But it is equally important that the sector keeps the innovative spirit that got it where it is today.
With the support of government a number of full-scale devices have been successfully deployed and tested at sea.
The world’s first full-scale tidal stream device, MCT 1.2 mega watt SeaGen turbine was deployed in the UK in 2008. And we didn’t stop there: we now have 10 large-scale devices deployed across the UK – more than the rest of the world combined.
We are also the first country to hold commercial leasing rounds, leasing so far 2 giga watts of seabed capacity. This is a real sign of the future growth prospects we can expect.
The UK is home to the world’s best testing facilities, in which the government has, to date, invested over £28m.
Through EMEC, FabTest, NaRec and WaveHub, our testing offer covers everything from tank testing of scale prototypes, to onshore component testing as well as nursery, full-scale device and array testing at sea.
With such an attractive offer, it is no surprise that we attract companies from across the globe.
Marine Energy Parks
Last year saw an initiative very close to my heart really take shape: the creation of a network of Marine Energy Parks.
Marine Energy Parks are central to the government’s goal of transforming the prospects of the UK marine energy industry and something I have personally championed – across both government and the sector.
Last January, the South West of England launched the first UK Marine Energy Park, closely followed by the Pentland Firth and Orkney Waters area in July.
It is still early days for these Parks. But they have already done an extraordinary amount of work to raise the profile of their regions and the UK as a whole as THE destination for marine energy.
There will, of course, always be some level of competition between different parts of the country. More importantly, however, the aim of the Parks is to foster collaboration for the benefit of the UK industry as a whole. Working together we can ensure that the UK’s offer to investors in the marine energy sector is even greater than the sum of its parts.
This is why I am delighted to announce that these two Marine Energy Parks will be formalising their existing collaboration through the signing of Memorandum of Understanding during this conference.
Effective, targeted funding
Over the years, the government has brought in high value investment in the sector through effective, targeted funding. I already mentioned our funding for single devices and test centres.
Alongside our partners in the Low Carbon Innovation Coordination Group we have ensured that innovation funding across the energy sector has been carefully targeted. This Spending Review period will see over £80m of public funds invested in marine energy innovation.
We have prioritised funding for the next big step for the industry: the move to the first arrays. Firstly through DECC’s £20m Marine Energy Array Demonstrator – MEAD for short; and secondly through prioritising marine energy projects in accessing EU NER 300 funding.
As a result, Scottish Power Renewables’ Sound of Islay and Marine Current Turbines’ Kyle Rhea tidal stream projects were recently awarded around 40m € in total of NER 300 funding. This represents a tremendous opportunity for these two UK projects to demonstrate the sector’s future potential.
We continue to work closely with the Scottish Government to maximise the benefits from our various funding streams for the benefit of the UK marine energy industry as a whole, again ensuring that the result is greater than the sum of the parts.
A framework to drive investment
Beyond these initiatives, we have also ensured we created a ‘bankable’ forward market for the sector.
Last year we announced that we are increasing the revenue support for wave and tidal technologies to 5ROCs/megawatt hour, more than doubling the level of support. This is an important vote of confidence in the sector. By creating leverage this should deliver a foundation for a globally successful UK marine industry and help to stimulate further investment in the sector.
So great progress across the board! The hard work we have all done to date has rightly put the UK at the forefront of this industry. We must now ensure we remain in the lead.
I’m particularly pleased, this morning, to have the opportunity to announce three more major investments in projects. This will help drive the wave and tidal sectors towards commercialisation.
First of all, DECC’s own MEAD fund. The sheer level of interest we received for the competition demonstrates how much the sector has developed in recent years. And I am pleased to know that other projects will be hot on the heels of these first arrays.
But now to the outcome of the competition. Subject to the usual contractual and state aid caveats, I am delighted to announce that following a stringent process, two excellent projects have been selected for funding. These are:
- The SeaGeneration (Wales) Ltd project, in Anglesey, Wales, which will be working with the SeaGen-S 2MW turbines developed by Marine Current Turbines.
- The MeyGen Project in the Pentland Firth Inner Sound in Scotland, working with Andritz Hydro Hammerfest 1.4MW turbines.
These projects have already made significant steps towards meeting the pre-construction phase requirements. Notably I can announce that SeaGeneration (Wales) Ltd have just been offered their marine consent and are moving apace to secure the remaining consents in the coming weeks. The aim is for these first two arrays to be operational by 2016.
Along with the other first movers, these projects will be absolutely vital in providing the learning and evidence that the sector needs to move to commercialisation. I am thrilled that we will be working with these pioneering projects in this very exciting adventure.
But it’s not just good news for the tidal sector. Today the Energy Technologies Institute has launched a £1.4m project with Pelamis Wave Power to boost the cost effectiveness of large scale wave energy arrays in the UK waters. This will build on the tests currently taking place at EMEC in the Orkneys and push Pelamis’ design forward to commercial readiness – increasing the output of their devices while reducing their cost of energy.
For these projects and those which follow to succeed, the sector will need to ensure that it is able to address or remove its main barriers. We will work with you on this where we can.
Through the Marine Energy Programme Board, which I chair, you have been telling us about some of these barriers. We have listened and worked with you to remove them. And we will continue to do so. The outcome of the Renewables Obligation Banding Review was a great example of this.
Going forward, setting up the right level of support for marine technologies under the new Energy Market Reform Contracts for Difference will be vital. We are dedicated to ensuring we get to the right outcome for the sector.
During the conference you will be hearing from my officials about the latest development from the Electricity Market Reform and how marine energy, along with other industries, will benefit from the new Energy Bill.
Together, building on the extraordinary progress of the wave & tidal sector to date and looking forward to the future, we can build on our current leadership to transform the UK into the global hub for a multi-billion-pound green industry.
Together, government, industry, investors, and entrepreneurs.
Together, partners in growth.