Abstract
The UK has some of the world’s largest tidal resources. This work has determined that the UK holds the second largest tidal range resource in the world after Australia, and the 6th largest tidal stream resource in the World. The UK’s tidal range and tidal stream energy resources hold the potential of supplying 230% and 16% respectively of the UK’s current electricity demand if projects offering attractive financial returns can be developed to tap into this comparative advantage in tidal energy resource. Financially successful tidal energy projects in the UK could then pave the way to grow the UK’s tidal energy sector through exports to countries with good tidal resources. Such export destinations are identified as; Brazil, Argentina, Australia, USA, and Indonesia in the case of tidal stream, and Australia, Argentina and France, Canada and the US in the case of tidal range.
Despite promise the sector has struggled in developing attractive financial projects. The levelized cost of electricity (LCOE) is higher than other renewables such as wind and solar, and revenue uncertainty (electricity price) hamper the bankability of such projects. Subsidies such as Contracts for Difference (CfD) can create price certainty as long they endure for the lifetime of the project, which is easier for tidal stream projects of 25 year duration, but the guarantee of pricing for tidal range projects having 120-year lifetimes is harder to fulfil.
This study shows that it will be challenging for tidal stream to reduce its LCOE to below the costs of solar and wind through the typical learning curves experienced by most new technologies due to the later arrival of the technology relative to solar and wind, and the smaller total future market potential of tidal stream vs wind and solar. This means that tidal stream must seek other revenue streams to compensate and this work has shown that tidal stream can attract a premium of 11-18 £/MWh over solar and wind. This premium is provided by the unique services that tidal can offer over solar and wind due to its predictability which helps in reducing the system integration costs to a power network.
For tidal range technologies the potential to reduce levelized cost of electricity (LCOE) exists but this potential is likely lower than for tidal stream as the technology employed is mature in nature and builds on classical hydropower expertise, nevertheless the sector has identified some cost reduction pathways. Tidal range is likely to attract a price premium due to its predictability when integrated into a power system network much like has been shown for tidal stream, however tidal range can also offer additional services that can attract revenues that are not accessible to tidal stream.
A significant element of the work in this study has focused on environmental impacts of tidal technologies. An exhaustive review of the literature base has not only highlighted pathways by which we can build and operate tidal technologies better to mitigate any negative environmental and conservation issues, but it has also highlighted the many co-benefits of tidal range can offer. Benefits include climate-change induced rising sea-level flood protection, storm-induced flood protection, reduced coastal erosion mitigation costs, improved marshland conservation and ecosystem services provision. The study maps such potential benefits, overlays them on a map and shows how these regions are often co-located with proposed tidal range barrage projects that offer the needed co-benefits to mitigate these risks. This work highlights the need to develop creative ways to factor these benefits into tidal range barrage projects to improve financial attractiveness and bankability.
This study outlines priority actions for the sector if the UK is to grow its low cost, tidal energy electricity generation and exploit this expertise to grow a world leading tidal energy sector that can export its technology and know how across the globe.