Tidal Energy Generation: Ringfenced Funding

Richard Graham Excerpts

Thursday 25th November 2021 Commons Chamber

[Ian Blackford]

We are where we are at the moment. My point to the Government is this. We know that the technology is there. We know that relative costs are already coming down dramatically; we can see that from the MeyGen project in the Pentland Firth, for example. Here is the opportunity to get behind something that could be revolutionary, in terms of providing clean energy—baseload energy, as I mentioned—but also the ability to create a manufacturing industry. We can perhaps learn from the mistakes that were made with wind turbines, and ensure that we are not relying on other countries to provide the infrastructure that we need, because we can do this ourselves. There is a responsibility that we have here, now, today, to get behind this industry.

[Richard Graham (Gloucester) (Con)]

Will the right hon. Gentleman give way?

[Ian Blackford]

I will give way one more time.

[Richard Graham]

I am grateful to the right hon. Gentleman, and I much appreciate his relatively new-found enthusiasm for the marine energy sector. I pay tribute to his colleagues, the hon. Members for Kilmarnock and Loudoun (Alan Brown) and for Inverclyde (Ronnie Cowan), for the help that they have given the all-party parliamentary group on marine energy, which I founded in July 2016. The group has 25 members, two of whom are from the Scottish National party, and their support is greatly valued. However, this is a great British success story, which has an impact on opportunities from the Isle of Wight, along the coast of Cornwall, up through Wales and into Northern Ireland.

As the right hon. Gentleman will know, this wonderful decision by the Government has been greeted by the chair of RenewableUK as a

“major step forward for the…tidal energy industry.”

The chair of the Marine Energy Council has said:

“The impact of this support cannot be overstated.”

Furthermore, Nova Innovation has said that this will be

“turbocharging the delivery of tidal energy”.

This is a pivotal moment, and I am sure the right hon. Gentleman will agree that it is a huge leap forward for marine energy.

[Madam Deputy Speaker (Dame Rosie Winterton)]

Order. It is not customary to read out very long interventions.

--- Later in debate ---

[The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)]

I congratulate the right hon. Member for Ross, Skye and Lochaber (Ian Blackford) on securing this important debate, and I welcome his support for the UK Government. He said that he came into the Chamber and, unusually, wanted to support the UK Government, and I am very grateful for that. I very much welcome that change of tack.

Marine energy, and tidal stream energy in particular, is of great interest to the Government. Our theme today is the merits of ringfenced funding for the deployment of tidal stream generation, and I shall say first that I agree entirely with the right hon. Gentleman that tidal stream is a homegrown industry of considerable potential. We have Europe’s and probably the world’s foremost tidal and wave energy testing centre—the European Marine Energy Centre on Orkney. We have other exciting testing centres and marine energy hubs burnishing their reputation on Anglesey, the Morlais project, and on the Isle of Wight, with the Perpetuus Tidal Energy Centre. That cropped up two weeks ago in Department for Business, Energy and Industrial Strategy questions, when my hon. Friend the Member for Isle of Wight (Bob Seely) asked about it. We have a raft of brilliant developers designing and building tidal stream devices in the UK, notably in Edinburgh, in Leith.

The right hon. Gentleman said that the UK Government funding of £20 million has come “only now”, but the picture is so positive, in large part because we have under successive Governments provided more than £175 million—not just the £20 million announced yesterday by the Prime Minister—in innovation funding to the marine energy industry in the past 18 years, of which more than £80 million has come since 2010. So when he talked about 20 to 30 years ago, this is exactly what we have been doing. Thanks to the extensive support afforded under the renewables-obligation mechanism, we were able to build in 2018 the largest tidal stream generating array in the world in the fast-moving waters of the Pentland firth.

It is fair to say, then, that the Government have a sound track record of supporting the tidal stream industry and helping to get it into the position it is in today, on the cusp of commercialisation and with good export potential. This week, however, is an occasion for looking to the future. We were all delighted to hear the Prime Minister announce yesterday at Prime Minister’s questions that the Government will establish a ringfenced budget of £20 million for tidal stream developments in pot 2 of the upcoming fourth contract-for-difference allocation round. The CfD scheme is our flagship mechanism for supporting the cost-effective delivery of renewable energy. Our decision this week will ensure that the nation’s tidal stream innovators get the opportunity they need to bring their cost of energy down, to ramp up the UK’s capture of the abundant energy flowing along our coastlines and to learn the valuable and exportable lessons that come with being the first in the world to deploy a cutting-edge technology at scale. The decision has been warmly welcomed.

[Richard Graham]

The Marine Energy Council has said clearly that it is grateful to Ministers for having listened, understood and acted, and so am I. There is now an opportunity for the sector to make a success of delivering on the funding that my right hon. Friend the Prime Minister announced and then of ramping up domestic capacity. At the same time, as the Prime Minister’s trade envoy there, I will continue discussions with Indonesia about perusing potential opportunities. Will my right hon. Friend accept an invitation to come and meet members of the sector and interested colleagues at the next meeting of the all-party parliamentary group on marine energy before the House rises?

[Greg Hands]

I gladly accept my hon. Friend’s invitation to meet. He does a brilliant job as the chair of that APPG and he does an amazing job as the Prime Minister’s trade envoy to Indonesia. He mentioned one or two of the warm words of congratulation on the announcement yesterday. RenewableUK said it was “a major step forward” and that it

“puts us in pole position to”—

lead—

“the global market in due course.”

RenewableUK also said it would

“unlock private investment and secure green jobs”,

while Neil Kermode of the European Marine Energy Centre on Orkney said:

“This support for the marine energy industry is absolutely pivotal”.

I appreciate the right hon. Member for Ross, Skye and Lochaber having brought this topic to the House. He perhaps might have left one with the impression that just he had made representations to the Prime Minister, but I checked back and found representations from my right hon. Friends the Members for Portsmouth North (Penny Mordaunt) and for Preseli Pembrokeshire (Stephen Crabb), and from my hon. Friends the Members for Meon Valley (Mrs Drummond), for Rother Valley (Alexander Stafford), for Rugby (Mark Pawsey), for Banff and Buchan (David Duguid), for Isle of Wight (Bob Seely), for West Aberdeenshire and Kincardine (Andrew Bowie), for Moray (Douglas Ross), for Ynys Môn (Virginia Crosbie), for Truro and Falmouth (Cherilyn Mackrory), for Gloucester (Richard Graham), for Sedgefield (Paul Howell), for Blyth Valley (Ian Levy), for Workington (Mark Jenkinson), for North Cornwall (Scott Mann), for St Austell and Newquay (Steve Double), for North Devon (Selaine Saxby) and for Barrow and Furness (Simon Fell).

I heard some doubt from the right hon. Member for Ross, Skye and Lochaber as to whether the £20 million per annum is a substantial-enough sum to put the tidal stream sector on its best footing. Indeed, the right hon. Gentleman suggested that £71 million is the minimum required for the job. I am afraid I cannot agree with him on that, because £71 million would mean the awarding of a contract to virtually every developer who shows interest in the auction as long as they bid at a level just a single penny under our stated maximum price. He and I worked together in the City of London in our time. He will know from his knowledge of financial markets—I know that he has since rebranded himself as the simple crofter—that there is no way to run an auction of that sort in that way.