Marine Renewables: Government Support

Margaret Ferrier Excerpts

Wednesday 7th December 2022 Westminster Hall

[Mr Alistair Carmichael (Orkney and Shetland) (LD)]

I beg to move,

That this House has considered Government support for marine renewables.

It is a pleasure to serve with you in the Chair, Mr Hollobone, and I am grateful to see a number of colleagues here this morning. I would like to place on record my appreciation, as ever, of the support that those of us who are part of the all-party parliamentary group on marine energy received in preparation for the debate, with very comprehensive briefings from RenewableUK, the UK Marine Energy Council and companies such as Orbital Marine Power and Nova Innovation.

I want to start by giving credit to the Government for the decision they took last year to introduce a ringfenced pot of £20 million for tidal stream generation as part of the contracts for difference allocation round 4. In particular, I want to place on record that the right hon. Member for Spelthorne (Kwasi Kwarteng), in his time involved with the sector, understood the opportunities for the United Kingdom presented by its development and used his time in office to drive policy in a way that has empowered the sector to develop, grow and continue to innovate as it proceeds along the road to full commercialisation. I fully appreciate that when the biographers eventually come to write the chapter on the right hon. Member’s legacy, that may not be the headline, but it was a significant contribution that is understood and appreciated nevertheless.

The Government’s decision last year unlocked investment in four projects this summer, as a result of which we will be able to obtain 41 MW of clean energy for United Kingdom households. Orbital Marine Power was awarded two contracts for difference totalling 7.2 MW of tidal energy deployments at the European Marine Energy Centre’s Fall of Warness site in Orkney. SIMEC Atlantis secured 28 MW to further develop the MeyGen site in Caithness, and in Wales, Magallanes was awarded 5.6 MW for a tidal energy project at Morlais in Anglesey.

[Margaret Ferrier (Rutherglen and Hamilton West) (Ind)]

I was delighted to have the opportunity to visit the European Marine Energy Centre in Orkney when I came to the right hon. Member’s constituency a couple of years ago. The work done at EMEC is really important for delivering cheaper, greener energy. Does he agree that, in the light of the energy price crisis, this research could be vital for delivering affordable energy to Scottish homes and businesses?

[Mr Carmichael]

I very much agree, and I should acknowledge the support that the hon. Lady has given to EMEC over the years. I am grateful for the support from across the political spectrum, all parties and none, and I will come on to talk quite a lot about EMEC later on.

It is worth reflecting for a second on how we have reached this point. Despite the fact that these are significant commercial enterprises—essentially competitors—the companies working in the sector have presented a united and strategic case to Government and investors. That has been enormously important, and since we still have some way to go, I hope that approach will continue. Trade bodies RenewableUK and the UK Marine Energy Council have also been critical in maintaining that unity of purpose and message, as has, in our own small way, the all-party parliamentary group on marine energy, under the chairmanship of the hon. Member for Gloucester (Richard Graham), who I am delighted to see in his place.

It is invidious to single out individuals when the story is one of team success, but the leadership that Neil Kermode has given as director of the European Marine Energy Centre in Stromness in Orkney has allowed that body to fulfil the role it was set up for almost 20 years ago. I do not think the Minister has yet visited EMEC, but he may wish to make his way there once we are through the winter and the days are slightly longer again, so that he can see for himself the work that has been done and continues to be done not just at EMEC but on the Heriot-Watt campus at the International Centre for Island Technology and the full range of private companies that have been established as spin-offs from these bodies.

I mention EMEC, and am keen for the Minister to visit, not just to give it the recognition it has earned, but to engage the Minister’s attention in the issue of funding. EMEC’s success has been built on Interreg funding, which was a dependable source of funding for as long as long as we were part of the European Union; it was an easy fit. Since we left the European Union, however, the shape of future support that replaces what came through Interreg is still not clear, and for EMEC that could soon become critical. My first ask of the Minister, therefore, is whether he will meet me and a delegation from EMEC so that we may identify future sources of funding.

The Government have now made a significant commitment to marine renewables through the fourth allocation round, and EMEC remains central to delivering the full potential of the Government’s commitment. That may be in the Department for Business, Energy and Industrial Strategy or the Department for Levelling Up, Housing and Communities, or it may fall within the remit of the Scottish Government—perhaps it is some combination of them all—but having come so far we cannot now allow that critical operation to fall between the gaps of Government.

I hope this morning’s debate will be an opportunity for us to stop and take stock of where we have got to, to explore some barriers that remain on the road to development and commercialisation, and to look forward to where we go from here—in particular, to what decisions we need to see made as we move towards the next round of contracts for difference allocation round 5.

It is worth reminding ourselves what is at stake. The United Kingdom has the potential to develop about 1 GW of tidal stream energy by 2035 and up to 11.5 GW by 2050. That is equivalent to over three times the generation capacity of Hinkley Point C. The costs of technology have fallen significantly in recent years. Analysis published by the Offshore Renewable Energy Catapult this autumn showed that that tidal stream can become not only a significant part of our future energy mix, but a cost-competitive one. If the sector is supported, by 2035 tidal stream could provide power at £78 per megawatt-hour; compare that to Hinkley Point C at £92.50 per megawatt-hour. By 2042 that figure could be £60 and by 2047 we could be looking at something in the region of £50. That is about £10 per megawatt-hour more than wind and solar today but, importantly, without the challenges of unpredictability.

The real opportunity that comes from the development of tidal stream power in particular is the chance to develop the baseload capacity that will be so important and to remove the intermittency of renewables. For so long the missing link has been the funding that would give wave and tidal energy the chance to develop commercially, and, as we know from other renewable technologies, once the process of the commercial roll-out is under way, the costs fall like a stone.

--- Later in debate ---

[Jim Shannon (Strangford) (DUP)]

It is a pleasure to speak in this debate, Mr Hollobone. The hon. Member for Gloucester (Richard Graham) is right—I will give my perspective on Strangford Lough. Helping to progress that is my objective in being here.

I thank the right hon. Member for Orkney and Shetland (Mr Carmichael) for setting the scene so very well. Like everyone else in the Chamber today, including me, he is a champion of the coastal regions. On almost every occasion in this House, he and I have supported each other, whether that is on fishing issues or marine life issues. Since my election to this House, it has been my pleasure to work alongside him and learn from him. I thank him for that.

It is a pleasure to see the Minister in his place. I look forward to his response, which I know is always given with consideration and helpfulness. I look forward to the contributions from the two shadow Ministers for the SNP and Labour. They both have a deep interest in these matters, and they will add much to the debate.

[Margaret Ferrier]

Will the hon. Member for Strangford (Jim Shannon) give way before he starts on his amazing speech? The Narrows located between Strangford Lough and the Irish Sea make an optimal location for tidal energy research. As the hon. Gentleman knows, it has hosted a few projects in recent years. Will he speak to the benefits that projects in Strangford Lough have for his constituency and further afield?