This report outlines the policy support mechanisms and the associated costs that are required to accelerate the commercialisation of the wave and tidal stream energy sectors. One of the primary challenges facing these technologies is the need to drive down the overall cost of energy generation and achieve cost parity with the wholesale market price. This can be achieved in part through the targeted application of technology push and market pull policy support mechanisms, which can drive both sector innovation and market growth for wave and tidal stream energy devices.
This report will analyse the use of existing market pull and technology push policy support mechanisms and evaluate their success and impact to date. While this report will focus primarily on the future of the wave and tidal sectors within the UK, it will also look to compare levels of investment and success with comparable policy implementation in the European Union. This section will culminate in analysis of current funding levels in the sector to date and provide commentary regarding whether the levels of investment offered so far are compatible with the aims of growing the sector.
This report will then present a number of future evidence-based scenarios, evaluating the impact of both technology push and market pull policy support mechanisms, with a particular emphasis on the Contracts for Difference (CfD) scheme and the attainment of high technology learning rates. It will forecast the associated levels of investment required for the ocean energy sector to achieve parity with the wholesale market price of electricity and the requisite funding required at a national level to achieve the deployment of 6GW of wave energy and 6GW of tidal stream energy by 2050.
This report is the fourth in a series that outlines the policy mechanisms and innovations that will be required to unlock both the economic value and system benefits associated with commercial scale wave and tidal stream energy deployments. Previous publications have estimated the potential benefits of 6GW of wave and 6GW of tidal stream to the UK to be:
- £11 billion - £41 billion in gross value added (GVA) to the UK economy;
- £1 billion per annum reduction in dispatch cost.
This report has built on these results and delivered comprehensive analysis that aims to find the optimal balance between financial investment in both technology push and market pull policies and the delivery of 6GW of wave and 6GW of tidal stream at the best value for both the consumer and the taxpayer.