Marine Renewables Industry

Jayne Kirkham Excerpts

Thursday 16th January 2025 Westminster Hall

[Jayne Kirkham (Truro and Falmouth) (Lab/Co-op)]

I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for securing this important debate, which is of great interest to me as an MP from Cornwall and co-chair of the all-party parliamentary group for the Celtic sea. I will probably replicate some points that have been made but it is telling that we are all calling for similar things, so I will say a little more about some of the industry’s asks.

Cornwall is ideally placed to play a leading role in the development of the marine renewables industries. We have 400 miles of coast, strong tides, south-westerly winds and proximity to the Celtic sea. We are in a prime location for offshore wind and tidal stream energy. The port of Falmouth in my constituency could service floating offshore wind turbines, and Truro and Falmouth is home to world-leading businesses such as Inyanga and Tugdock, which are at the forefront of marine renewables innovation.

However, the tidal and wave industries, like floating offshore wind in the Celtic sea, need support from the Government and particularly ringfencing for AR7, to which I will return. As hon. Members have noted, tidal stream is a highly reliable method of energy generation because it is unaffected by weather, offers a stable energy supply and complements other more intermittent renewable sources, such as wind and solar. It also presents a number of benefits to UK jobs, supply chains and energy security. Tidal stream projects are being deployed with over 80% UK supply chain content, which is a much higher percentage than for some other renewable technologies. However, tidal and wave are smaller, less developed industries than solar or fixed offshore wind. Tidal energy currently forms less than 0.01% of the UK’s electricity generation, but the UK Marine Energy Council says that it has the potential to meet over 10% of demand.

I welcome the Government’s recent clean power action plan, which recognised the potential for tidal stream and floating offshore wind to be important components of long-term decarbonisation in the UK. However, for that to happen—and if marine renewables are to follow a similar cost-reduction pathway to solar and fixed offshore wind—the marine renewables industry does need Government support.

From AR4 onwards, tidal energy has benefited from ringfencing, which led to Inyanga, based in my constituency, being awarded CfDs in AR5 and AR6 for their HydroWing technology, which will be deployed in Morlais, Wales. Previous allocation rounds show that the sector can respond successfully to a ringfence. Inyanga had the only successful pot 2 offshore project to win a CfD in AR6.

The ask of Great British Energy is to commit, say, 3% of its budget to investing in marine energy because tidal stream projects are being deployed with over 80% UK supply chain content spend, which is significantly higher than for other renewable technologies. GB Energy should seek to embed and accelerate deployment of that UK content in projects installed here and around the world. It could take equity stakes, under commercial terms, in projects that have secured a CfD.

Other hon. Members have asked about a Government-industry marine energy taskforce. The purpose of that taskforce would be to bring together key players from Government, industry, regulatory and other relevant organisations to enable marine energy development—the embedding of that UK content in projects deployed here and around the world—to support the Government’s ambition to make the UK a clean energy superpower. I have also been pushing for that kind of masterplan and leadership for floating offshore wind. Others have asked about the 2035 targets, including a 1 gigawatt tidal stream and 300 megawatts of wave energy deployment. Setting those targets will boost investor confidence and support investment in coastal communities and beyond.

The UK could also introduce innovation funding, particularly for marine energy. Between 2017 and 2022, such projects received only £17 million in innovation funding. Wave energy projects received £57 million of funding, £39 million of which came from the Scottish Government. That targeted innovation funding has been proven to reduce the overall cost associated with commercialising these emerging renewable technologies. Two tidal scheme projects in Scotland were successful in the last Horizon Europe call, which demonstrates both the importance of a close UK-EU relationship on marine energy and the attractiveness of the UK as a destination for that innovation funding.

I cannot stand here and talk about renewable energy in the sea without mentioning floating offshore wind, so I will reiterate some of the asks that that industry would have as well to kick-start floating offshore wind, particularly in the Celtic sea. Like tidal and wave energy, floating offshore wind needs a ringfenced element in the AR6. The one-size-fits-all route is disadvantaging the Celtic sea due to the comparative lack of port infrastructure, skills and wider supply chain support. We are a virgin area; unlike Scotland, we have not had oil and gas before, so we are starting from scratch.

We need technological and geographical ringfencing, CfDs for the test and demo sites in the Celtic sea, and support for stepping-stone projects such as TwinHub, which has a CfD but is facing the challenges of developing that supply chain and the now out-of-date cost of the CfD. The £1.8 billion ports fund can now be distributed quickly in a multi-port strategy that was developed, allowing ports across the region, such as Falmouth in my constituency, to work together to prepare for and benefit from the opportunities that floating offshore wind presents.

The Crown Estate Bill passed through the House recently. Those option fees could, for example, be diverted to local supply chain building. Additionally, outside of the industry, other hon. Members have mentioned that we need that strategy for the ocean as a whole. It is crucial that we have a long-term marine spatial strategy, so that everything in the ocean has its place and we balance energy generation with important industries such as fishing, and with protecting the natural environment.

Creating clear frameworks for each sector would give certainty to developers, which would help speed up the deployment of these renewables projects. Co-ordination would involve linking existing plans, such as the Crown Estate’s whole of seabed programme, the strategic spatial energy plan and DEFRA’s marine spatial prioritisation programme, ensuring that the UK harnesses the benefits of marine renewables while supporting fishing and safeguarding marine habitats.

--- Later in debate ---

[Liz Saville Roberts]

When we find ourselves discussing any large-scale energy project, we come up against some of these pragmatic, practical questions. Until we have answers to those, it is difficult for us as local MPs to do more for our constituencies than promote. I have found myself in a similar situation with Trawsfynydd and small nuclear reactors; I have been in this place talking about that for 10 years and have not got past the pragmatic first points to actually see further developments.

The UK Government could use Great British Energy to invest in and develop pre-leased and consented grid connector sites for marine energy projects in Wales and elsewhere. However, the Great British Energy Bill does not make any reference to tidal stream or to marine renewable technologies, and, sadly, the Welsh Government’s announcement of tidal stream SRAs does not make any reference to GB Energy—if only those things were joined up and we had that co-working between Cardiff and London that is so vaunted. In his summing up, can the Minister set out what relationship GB Energy will have with the Welsh Government’s SRAs, because at present there seems to be a lack of joined-up thinking? I also echo the sector’s call for the Government to commit £250 million of Great British Energy’s budget to accelerate the development of and embed UK content in tidal stream projects and for a 1 GW target for deployment by 2035.

I turn to a particularly Welsh issue, although other hon. Members have touched on it—namely, the relationship or partnership between GB Energy and the Crown Estate, which will be crucial in the development of marine energy projects, given that it owns the sea bed to 12 nautical miles from the coast, including in Wales. It is therefore vital that Wales has full control over the Crown Estate, as is the case in Scotland, so that the people of Wales, not civil servants in Whitehall, shape the development of marine renewables to fit our nation’s needs and aspirations. That comparison between Wales and Scotland will not go away, and in a moment I will show hon. Members why. We could therefore ensure real benefits to Welsh communities, including the use of local supply chains and jobs in deprived, low-wage areas that will follow on from those projects. We could shape those with Welsh needs in mind.

[Jayne Kirkham]

I have a question about the Crown Estate and the devolution of it. How would that work in the Celtic sea, where Cornwall would obviously benefit a great deal from some of the floating offshore wind in other installations there?

[Liz Saville Roberts]

Some of the politics of Cornwall already looks to Wales for guidelines; the same question arises from Scotland regarding where the border lies with England there. None the less, from Wales’s point of view, we have suffered a long tradition of extractive industries, and that looks set to continue.

There is a fair argument for the devolvement of the Crown Estate in Wales. The only argument against it is that it would cause confusion in the intervening point, but any change causes confusion. Devolution of the Crown Estate, which would give Wales, rather than the Treasury, the power to manage local supply chains is a call from many politicians in Wales—including many Welsh Labour politicians—that will not go away.

Scotland, where the Crown Estate is devolved, has successfully aligned the Crown Estate with the marine planning process and sought to make use of those local supply chains. The Scottish Government also distribute the net revenue generated by the Scottish Crown Estate marine assets to coastal local authority areas—those poor areas which we all want to seek every means we can to support. That coastal community benefit amounted to £11.1 million in 2023-24. Why are we preventing that from happening in other places? Wales should be able to do the same. The Minister will no doubt say, because this is the argument we have heard before, that devolution will fragment the market and deter investment. The success of the Scottish Crown Estate emphatically proves that not to be the case.

I want to touch on the contracts for difference auction process and EU innovation funding. To date, the marine renewables industry has been set at £20 million, £10 million and £15 million ringfenced in the last three auctions. If we want to build a renewable energy industry with high levels of UK content, the level needs to be set—as the lead Member for this debate, the right hon. Member for Orkney and Shetland, has said—at £50 million for tidal stream and £5 million for wave. I am very supportive of that for this year’s renewable auction. Marine Energy Wales says that without this ringfence, Welsh tidal projects will be disadvantaged, stalling momentum and undermining the benefits already delivered by sites like Morlais.

In addition to ringfenced funding domestically, we should maximise institutional flows of funds for the sector. Leaving the European emissions trading scheme has meant that the UK no longer receives sums from the related EU innovation fund. Rejoining that scheme would help unlock further sources of funding for marine developments.

I welcome the discussion of the marine energy task force. Of course, skills are devolved to Wales. We need to make sure that the advantages work between the Welsh Government and what is being proposed here, and that there is discussion on that.

Given the weather we have today in London, we are not going to be doing much in the way of tidal stream in the Thames, but this is the sort of day in winter—grey, no wind, renewables not otherwise generating—when we should take the opportunity to bring forward further electricity supplies.